At least a couple of times each month, I talk with customers who have been hit with chargebacks because they (or someone at their company) unknowingly took a stolen credit card. So although I have mentioned this in the past, I thought I would give another reminder that flooring dealers are being victimized, and you need to protect yourself. If you take a stolen credit card, and release the product, you are liable for the chargeback.
The basic scenario we are seeing is that someone calls and needs material. Often the story is some variation of them working on a job and running out of flooring and needing some fast. They pay with a credit card over the phone, and then say they will send their guy to pick it up. The card appears to go through, the material is picked up, and it’s only later that the bank notifies you that it was a stolen credit card, and that you are on the hook for it.
The thing that makes it tricky, and the scam so effective, is that it could take some time before you find out it was a stolen credit card. If the owner of the credit card quickly realizes and reports the theft, it is a relatively short time. But if the card holder is not paying close attention, it could stretch out as long as a month or so.
So let me stress once again that if you are doing any sort of cash and carry sales of inventory, it is critical that you know who the customer is. Or, if you do not, in order to protect yourself, you need to very carefully vet out the customer and order, to ensure you are not dealing with a stolen credit card.
A few ways to do this is:
- Have the customer come into your store in person, and make sure their ID matches the name on the credit card.
- If they won’t come to you, offer to go meet them in person, so that you can get their ID and needed signatures. For a $10,000 cash and carry deal, you should be willing to do some driving in order to protect yourself. If they are out of town or make up some excuse, be extremely cautious.
- You can offer to meet up over Zoom or Facetime. During the call, have them show you their credit card and ID, and make sure everything matches up.
- Make sure the zip code that is tied to the credit card is within your general area, and that it is tied to the customer or the jobsite. If it is an out of area zip code, be suspicious.
- You can also call their bank (the number listed on the back of the card) if you are unsure. The bank will sometimes call the customer to validate the charge and card.
- If someone is giving you more than one credit card, be wary.
Along those lines, we’ve noticed an increase of fraud attempts on our QPay website, where people are trying 4 or 5 different credit cards until they find one that works. The QPay virtual terminal displays all of the card “failures”, so it can tip you off to someone trying electronically to use stolen credit cards or numbers.
I realize we’ve talked about this quite a bit, but we’re still seeing dealers losing money over this same scam. So we just want to be sure that the word is out and that you protect yourselves. If you have any questions, feel free to reach out.
