Fraudulent Transactions
 

(Checks, Credit Cards, and Gift Cards)

 

Merchants find themselves dealing with fraud on many levels including checks, credit cards, and the ever growing popularity of gift cards. Here are a few examples of fraud using these payment methods:
 

Credit Cards:

  • Merchandise purchased with lost, stolen, or counterfeit credit cards.

  • Merchandise purchased using debit card fraud.

  • Fraud artists observe consumers when PIN is entered.

Checks:

  • Merchandise purchased with bad, stolen, or counterfeit checks.

  • Checks easily produced by photocopier or PC with standard printer.

Gift Cards:

  • Dishonest employees can “launder” gift cards, steal them outright, or switch or convert cards.

  • Customer walks away with 0-value card while the employee pockets the card with the monetary value.
  • Gift cards given in exchange for returned merchandise have helped perpetrate chargeback fraud.

Facts:

  • Fraud costs U S companies $6.6 billion per year.
  • Chemical Bank of New York reported a 50% increase in fraudulent checks last year.
  • Wells Fargo admitted that transactions involving fraudulent checks rose an alarming 500%.

Solution:

The U.S. Department of Justice says to combat business fraud it is advisable to install closed-circuit television (CCTV) camera systems at checkouts.

Video Surveillance and Employee Training–Inform staff of the known methods of check-cashing fraud and illegal card use that involve collusion with sales clerks and inform them of the consequences of participating in such offenses.