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How To Protect Your Online Store From The Internet Burglars,
By Lynne Schlumpf, Sat Dec 10th
Thanks for joining me for Part 2 of this important article abouthow to save your store from online thieves. Here's a scenario that will help you identify who is savvy tocredit card fraud and who is not. Let's say that John Smith runs an Internet store that sellsbooks. His store is called Leaflets for Life. Customers order,then he ships the product a few days later.
We have another Internet store owner named Joe Black. He runs acomputer parts store called Laptops 4 U. The owner of Laptops 4U is aware that his merchandise is THE HOTTEST ITEM to steal onthe Internet. (besides credit card numbers, of course) JohnSmith puts his feet, turns on the satellite TV, and lets theInternet run his business silently. John Smith gets a sale on his online store. The order is for 300books. John loves the way the Internet allows his business topretty much operate on autopilot. He knows that the 3rd partyvendor he uses to take all his credit card sales took care ofit, so all he has to do is print an invoice and pack it up. Offhe goes with the merchandise to the post office, marveling athis first sale from his store. Joe Black gets a sale on his online store. The order is for a$3,500.00 laptop. He does not use a 3rd party vendor for hiscredit card processing. He just has a store that uses SecureSocket Layer, then it emails him with a link that he clicks onto take him to his orders. Joe Black's process takes a lot moreadministrative work, but he feels in control of his business. Hereally wants to be aware of what goes on every minute. Joe, orwhoever prints out the orders from the store, takes a long,leisurely look at this order. He knows what he is looking for.He gives the order to a orders clerk. The orders clerk picks upthe phone, dials the number on the order. "Mr. Jones, hi, myname is Angela. I work here in the customer service department,and we are verifying your order from our online store. Toprotect your security could you tell us if you ordered itemsfrom our online store today, and if you did, could you pleaseprovide us with some verification of your order. We WANT TOPROTECT YOU. Could you please give us the 800 number on the backof your credit card and your bank's name?" Customer: "Uh, whoare you trying to call? This is the roller skating rink inTopeka,
Kansas." Angela thinks that perhaps the person whoordered just mistyped the phone number. She gets out her list ofmerchant phone numbers and calls up Mastercard. "Hello, My nameis Angela, and my company is Laptops 4 U. We are a merchant onthe Internet, and we need to somehow verify that a card numberused on our online store was not stolen." Mastercard happilygives her address of the cardholder and other information thattells Angela that her company could have lost a laptop andpossibly their merchant account when the credit number does notgo through the system. ......the transaction stops RIGHT THERE. Go no further. (this isnot a totally untrue story...happened to us in a similarsituation) John Smith gets the statement from his Merchant Account providerabout a month later. He has sold about 1,000 books this month.His books are a real hot item! Two days later, John Smith getsanother letter from his merchant provider. John's merchantprovider, like many, automatically deposits or deducts creditcard transactions from his checking account. After John got thefirst statement, he gave most of the profits to his wife so thatshe could go down to the A&P superstore and buy some food. Shealso decides they need a new living room couch. The money'sspent. The 300 books that someone ordered, well - they wereordered on a stolen credit card number. Did John or hisautomated online store merchant know this? How could they? Theowner of the credit card did not know their number andexpiration date had been lifted from a store somewhere on theNet. John is out 300 books and $4,485.00 in revenue. He alsoreceives a threatening notice that if this happens again, he'lllose his merchant account. ------------------------------------------ Did you noticeanything strange about the merchant account provider taking themoney away from John? Mastercard did not eat any of the loss,and neither did John's merchant account provider..notice that?The merchant eats ALL OF IT. John is now in to the merchantaccount provider, and some nimrod is off selling his books insome far away corner of the Internet.
About the author:Lynne Schlumpf is the CEO of Route 66 Cyber Cafe, Inc.,http://www.r66cci.com, a Web hosting and design companyspecializing in promoting websites for new owners, buildingaffordable e-commerce sites, and providing reliable web hostingsolutions as an affiliate of Virtualis Incorporated.
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