How to Prevent Online Parts Payments Fraud

Parts Departments are more prone to fraud using Online Payments.
We felt that it may be timely to create an information package outlining the ways to identify potential fraud and proper processes when accepting online credit card payments for your dealership.
This type of credit card fraud can represent a considerable cost to your business. Training your staff to identify potentially fraudulent transactions is an important first step in protecting your business from financial loss. 
Orders of the types detailed below are generally some of the key ways that fraudsters operate. 
1.  New customers who want to place multiple large orders and request to pay online 
2.  New customers who want to use their own shipper/courier 
3.  Any unusually large orders of unrelated parts 
4.  Large orders for multiple quantities of the same item 
5.  Customers who place a number of orders within a short period of time (over a 7 to 10 day period) 
6.  Customers who want to place orders using multiple credit cards 
In any of the above instances you should let the person ordering know that the following processes will apply. 
  • The most important thing you can do to prevent this type of fraud is to Validate the Identity of the Customer - Let the person know that credit cardholder will have to provide identification at the order delivery or when they pick up the parts and that signature is required.
  • You may also choose to have the customer present/prove their identity before placing the order.
  • Let the customer know that the order will be shipped to the cardholder billing address. If not possible, then verify that the person ordering is the cardholder. Make sure that you get the actual cardholder’s written approval that states bill to and ship to address are different, and they’ve approved. 
  • When the parts are delivered the sales invoice is signed by the cardholder ordering the parts.

Please follow these simple steps to avoid fraudulent transactions in your parts department.

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