Don’t take shortcuts with credit card transactions

This article originally appeared in the May 2015 edition of INSTORE.

Among the worst crimes that we can be victims of are the ones that we participate in. Credit card fraud and bad checks are silent killers. In these types of crimes, not only do we lose the money, we lose merchandise as well.

Everyone knows that a personal check can be bad, but did you know that a cashier’s check can be faked or altered? I suggest that anytime you get a cashier’s check from anyone other than a longtime customer, you call the issuing branch of the bank and verify the number, amount, payee and payer.

When it comes to credit cards, always bear in mind that in fraud cases, you must prove that a credit card was in your hands. If you get a clean magnetic swipe, you have proof, because your machine records the card was present. But, if you don’t get a clean swipe and have to use the credit card machine’s keypad to manually enter a credit card number, be aware that you are at risk. If you can’t get a clean swipe, you need to take an imprint of the credit card using an old-style imprinting machine. We usually also take a copy of the customer’s driver’s license along with the credit card.

Jewelers open the door to risk any time we handle a phone order, even if the item is subsequently picked up by the card holder, a courier, a secretary, a friend or whomever. Again, it’s because the credit card used to make the “purchase” was not in your possession.

In any shipping issue, think Nigeria, even if the call comes from Kentucky. If the person calls your store in, say, Missouri and wants a large item shipped to his daughter in New York, be paranoid. The first question you should ask is this: “How did you hear about us?” I always call the issuing bank to verify that their customer is making the purchase. I also ship only to the billing address, or request the customer add another address as an alternative with the credit card company.

It’s a good, simple way to screen. If I decide to push ahead with the sale, I always call the issuing bank and ask them to call the cardholder to make sure they are the ones making the purchase.

“Be careful: Accepting any order over the phone holds risks, and that is because the credit card was not in your hands.”

One of the latest scams involves a “customer” whose credit card gets declined when he or she attempts to make a purchase. The scam artist then picks up a cellphone, pretending to notify the bank about the jewelry purchase. Next, the person hands the cellphone over to the jewelry salesperson, who is greeted by a slick-sounding “bank official” who asks the normal questions before giving the salesperson the authorization to proceed. The salesperson takes the card and does what is called a “forced sale,” swiping the card and punching in the authorization code. A few weeks later, a jeweler gets notice of a chargeback. What was the mistake? Obtaining the authorization from the person on the cellphone rather than through the store’s normal authorization center. The solution? Always call your own authorization center.

Never use the phone number on the back of the card, as this could be a fake number as well. Again, always call your center first. If you need to talk to the issuing bank, get the number from your call center.

In most credit card scams, we supply some of the ingredients: greed and the desire to make the sale. My advice? Talk to your credit card processor now and learn the rules now — or you will pay later.

Leo Anglo is the general manager and buyer at Vincent’s Jewelers in Creve Coeur, MO, and a past president and current board member of the Missouri Jewelers Association.