(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.
- 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.
- 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%.
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.