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Payment Security and Fraud Prevention

Updated

Protect your business from credit card fraud and chargebacks. This guide covers essential fraud detection tools and best practices to minimize fraudulent orders while maintaining smooth operations.

Critical: You, the merchant, carry the liability for fraudulent online credit card purchases. If you ship products paid with a stolen card, you may lose both the product and the payment when chargebacks occur.
🚨 Recognizing Fraud - Common Warning Signs

Watch for these red flags that indicate potential fraud:

High-Risk Order Characteristics

  • Multiple orders from same IP address with different cards
  • Multiple declined card attempts on a single order (20+ attempts)
  • Orders with expedited/overnight shipping
  • Billing and shipping addresses don't match
  • Suspicious names (John Doe, Mr. Smith) or generic addresses (123 Main Street)
  • Orders from new guest accounts with no purchase history
  • Email addresses that look suspicious or randomly generated

Quick Review Checklist

Before shipping suspicious orders:

  • Check customer history: Customers with 100+ successful orders are generally safe
  • Verify ZIP codes: Confirm the ZIP code actually exists
  • Compare addresses: Mismatched billing/shipping increases risk
  • Wait 24-48 hours: Most stolen cards are reported within this timeframe
  • Use order statuses: Set suspicious orders to "On Hold" or "Pending Review" to prevent accidental fulfillment
🛡️ Essential Fraud Protection Setup

Step 1: Enable AVS & CVV Verification

AVS (Address Verification) checks if the billing address matches credit card records. CVV verifies the customer has the physical card.

1Navigate to Settings > Pay Methods.

2Click Edit next to your payment gateway (Authorize.net, PayPal Pro, etc.).

3Check Use AVS and Use CVV.

4Click Update.

Important: Also configure AVS settings in your payment gateway account. Start with moderate settings and adjust based on your fraud experience - strict settings may decline legitimate international orders.

Step 2: Configure MaxMind Fraud Risk Scoring

Each order receives a risk score based on IP location, email reputation, device fingerprinting, and historical fraud patterns.

1Navigate to Settings > Credit Card Fraud Detection.

2Use the slider to set Flag Order Above Risk Score (recommended: 60).

3Click Submit.

Recommended Risk Score Guidelines:

  • Above 60: Reject order
  • 20-59: Review carefully before shipping
  • Below 20: Accept order
Note: Your plan includes 500 monthly fraud scoring credits (1 credit per order). Upgrade to Premium credits for card-issuing bank details useful for verification calls.

Step 3: Require Phone Number Validation (Storefront)

Go to Settings > General Settings > Enable Phone Number Validation in Storefront. This enables verification calls and improves MaxMind fraud detection accuracy.

📞 Verifying Suspicious Orders

When an order seems suspicious, verify before fulfilling:

Option 1: Call the Customer

Use the phone number provided to:

  • Confirm they placed the order
  • Verify the shipping address
  • Ask them to contact their credit card company if they didn't authorize the charge
Note: Fraudsters sometimes use the real cardholder's phone number. If someone answers and didn't place the order, you've caught fraud before shipping.

Option 2: Call the Card-Issuing Bank

Contact the card-issuing bank to verify the transaction. Have ready:

  • Your merchant number and phone number
  • Customer's full name, address, and phone number
  • Date and time of credit card authorization

Option 3: Contact Your Merchant Account Provider

Once fraud is confirmed:

  • Contact your merchant account provider immediately
  • Report the fraudulent transaction details
  • Void the charge if possible (don't just refund)
🚨 Emergency Response - Active Fraud Attack

If you receive multiple fraudulent orders in a short period, take immediate action:

Immediate Steps

1Disable Real-Time Credit Card Processing:

  • Go to Settings > Pay Methods
  • Click Edit next to your gateway
  • Uncheck Enable
  • Click Update

2Disable Guest Checkout:

  • Go to Settings > Checkout
  • Disable guest checkout to require account registration

3Switch to Manual Processing:

  • Enable Offline Credit Card Payment in Settings > Pay Methods
  • Manually process cards through your terminal

4Create Support Ticket:

  • Report the attack to Pulse Commerce Support
  • Include IP addresses and order numbers

When to re-enable real-time processing: After 48-72 hours with no fraudulent orders, gradually re-enable and monitor closely.

Advanced Protection: Kount Integration

For sophisticated fraud attacks, consider Kount - a third-party fraud prevention service with:

  • Real-time automated fraud detection and blocking
  • No manual intervention required

Sign up at kount.com/pricing, then create a support ticket with your credentials for integration.

📚 Quick Reference & Resources

Credit Card Data Retention

Credit card numbers are automatically deleted 60 days after order placement (all numbers are encrypted). To extend retention up to 180 days, an Authorized Contact must submit a written request via support ticket.

Action Checklist

  • ✅ Enable AVS and CVV verification
  • ✅ Configure MaxMind risk score threshold (recommend 60)
  • ✅ Require phone numbers during registration
  • ✅ Review high-risk orders before fulfillment
  • ✅ Use "On Hold" status for suspicious orders
  • ✅ During attacks, immediately disable real-time processing

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Getting Help

For fraud attack assistance: Create a support ticket at support.pulse-commerce.com with order numbers and IP addresses.

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