Fraud & compliance

5 Steps merchants need to take to protect themselves from in-store credit card fraud

As a merchant, you’ll never eliminate credit card fraud. That’s the truth. Criminals are becoming savvier by the day. But that doesn’t mean you can’t take steps to protect your store. There are many things you can do to significantly reduce your risk, both online and in store, without creating too many hoops for your customers to jump through when they’re trying to pay with credit.  

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For the best defense, use a combo of the fraud prevention tips and strategies below.  

1. Train your employees to spot credit card fraud  

Even if you own a small store, you can’t always be behind the counter. And even if you know which suspicious signs to look out for when it comes to credit card fraud, your employees may not. That’s why it’s so important to train your employees to spot signs of fraud in card-present transactions and train them to use proper fraud prevention techniques, including: 

  • Checking the card’s security features for damage 
  • Asking for ID 
  • Verifying signatures 
  • Refusing to manually enter card details 
  • Not accepting letters of authorization allowing someone else to use a person’s credit card 
  • Not allowing customers to rush them to use poor checkout techniques 
  • Knowing who to call for discreet authorization 

 2. Upgrade your terminals for EMV compliance 

One of the best ways to reduce fraudulent credit card use in your store is to upgrade your terminals. If you’ve had your credit card machines for more years than you can count, then they may not be fitted for use with EMV chip card technology, which has been proven effective to reduce fraud. According to Visa, EMV technology has been known to reduce counterfeit fraud losses by 75%. 

Being EMV compliant is actually a legal requirement for merchants. Plus, it’s a smart move for your business. If you were to ring up a customer with an EMV chip card on an old, outdated magnetic card swiper, the customer can dispute the charge and you would have no legal recourse.  

But if you’ve upgraded your terminals for EMV compliance, you won’t be held liable for the charge. It just makes good business sense.  

3. Just say “no” to damaged cards 

If a customer tells you that their credit card is damaged and your credit card terminal might not be able to read it, consider it a red flag. And refuse to accept payment with that card. 


Criminals often intentionally deface stolen credit cards in order to make you manually enter the card data. This allows them to bypass the fraud-detection features built into the payment terminals.  

If this situation occurs, ask for a different card or refuse the transaction altogether.  

4. Ask for ID 

If you’re processing a big-ticket or unusually large transaction via credit card, do your due diligence and ask for the user’s ID. Credit cards should only be used by their authorized users. If you accept a credit card from someone other than its owner, you could be liable for any chargeback if fraud were to occur. 

Of course, it’s not realistic to do this with every customer and every transaction. You want to speed up your checkout process—not slow it down. But it will only take a few seconds to validate the authorized user if you’re suspicious of the transaction, the card, or the customer for any reason. Better safe than sorry, after all. 

5. Call your merchant services provider 

If in doubt, reach out to your merchant services provider or payment processor. Give them a call to discreetly request a real-time authorization. They can check to determine whether the card in use has been reported lost or stolen, whether the credit card number is valid, and whether the credit limit has been exceeded.  

Then, they can either deny or approve the transaction, so you can have peace of mind knowing it’s legitimate. Plus, you won’t have to confront the customer directly when using this approach, which is safer for your employees.  

Train your staff, know the signs of in-store credit card fraud, and stay vigilant. There are many criminals out there. Don’t allow your store to be defrauded.  


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Ben Smith

Ben brings 20 years of experience to his role as IT Director for BNA Smart Payment Systems. Among his many directorial duties, he is responsible for the selection, acquisition, development, installation, maintenance, and support of IT infrastructure. Ben also establishes and leads a cross-functional architectural committee, acts as a technical expert and a critical technical resource across multiple disciplines, and consults on all system implementation, modification and integration activities. He graduated with Honours from Durham Collage in Computer Programming, and takes yearly training courses for security and development technologies to remain up-to-date. Outside of work, he loves playing hockey and skating with his family, and also enjoys gardening and cooking.

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