There are various versions of credit card present scams. The most common one involves someone asking a merchant to run a transaction for more money than it’s worth and then issue the difference back.
The purchase of artwork can be used as an example. An individual purchases a $1500 piece of art, they request to have it shipped back to their home without knowing the cost of shipping. The individual asks the merchant to run the card for $1500 price tag in addition to a hypothetical shipping cost of $1000, in total running the card for $2500. From this amount the merchant is instructed to deduct the price of the art, the shipping costs, an inconvenience fee -as suggested by the individual, and lastly, the difference is to be sent back to the purchaser via check. At this point, a $2500 payment has successfully processed but the merchandise has been shipped, shipping costs have been covered by the business, and check for the difference has been mailed.
The way credit card billing cycles work, a victim of a stolen credit card will not know for about a month that suspicious transactions were processed on their account. Merchants are then hit with a chargeback and left responsible for covering all costs involved with the fraudulent transaction.
Steps To Take In This Situation
A merchant should have steps in place to prevent fraud from happening at their place of business. If someone requests an overpayment transaction, the first thing a merchant should do is call their payment processor and ask for a Code 10 Authorization Request. A Code 10 Request is highly recommended because of the discreetness of the term. Normally, with Code 10’s the fraudulent consumer could still be inside the establishment. Code 10 is an inconspicuous term in the industry that was designed so that the person attempting fraud is unaware the merchant is indicating fraud to their processor.
Having a physical credit card in hand means the card issuer can be called. The customer service phone number on the back of the card should be verified for legitimacy. The actual card should be inspected to ensure it’s real and that it’s a chip card. Fake cards with fake customer service information are easy to make and easily attainable.
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