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Fraud Protection

In my past, I worked in retail. From when I was 16 years old until I was 31, I spent time working in various areas of retail from corporate offices to store level management. One position I held was Operations Manager for a major electronics retailer. The Operations Manager was responsible for all “Bad Debt”, among other things. Bad debt is any sale that took place where there were no actual funds, whether it was a bad credit card, bad checks or counterfeit money. So, it was also my responsibility to train the front end staff on what to look for, which I will cover here.

These are tips that I hope people will be able to use at craft fairs. Some will be easier than others, so as odd as it might sound, you should practice at home. The easier it is for you to tell when something is wrong, the faster your transactions will be and you can get back to your other customers that are hopefully lined up to buy your goods 🙂

Travelers Checks

We’ll start simple. This is one you don’t need to practice, it is a simple rule: Traveler’s checks have ink on the back that is intended to smear if wet. Slightly gross warning: Lightly lick (or dampen in some other manner) a finger tip and drag it on the back side. If the ink smears, it is legit. Makers of Inkjet and Laser printers pride themselves on ink that won’t smear. If it doesn’t smear, hand it back and ask for another form of payment.

Credit Cards

Taking Credit Cards at a craft fair can be tricky, especially if you are taking them “manually”, where you run an imprint machine over them. In doing so, you are hoping the magnetic stripe on the back matches the info you are imprinting.

A common thing people will do to alter the numbers on the face of a credit card is throw it in the microwave and then pres the numbers flat. Remember those old school labeling devices that typed letters and numbers into hard plastic strips of plastic? That’s what they will use to put new numbers on the credit card. But don’t sweat it! The old numbers aren’t completely gone- hold the card up and look for the “ghost” images of the original numbers. There’s no way to make the original numbers vanish completely, especially by the hologram.

And that is the next point- look for the hologram.

American Express: Words “AMERICAN EXPRESS” printed in fine print throughout the face of the card.

Visa: Hologram to the right of a bird with wings spread.

MasterCard: Hologram to the right of 2 circles, each showing half of the Earth on top of “MasterCard” print

Signature Strip– This one is tough because so many people have what they believe are their own standards. Some people refuse to sign it, believing if they sign it they are showing thieves what their signature is to copy. Others write “See ID” hoping the clerk/vendor will actually ask for ID for each purchase. Here are tips on this area:

Strip is worn away: Under that strip it says “VOID”. Thieves will scratch that off if they feel they cannot match the real signature there. If you accept a card that had this worn away, the credit card company will not reimburse you.

Not Valid Unless Signed: This is above that strip and, technically, requires the user to have their signature in the strip. Same as above- if there is no signature and you take the card, you will eat the cost if it is bad.

Matching Signatures: You can take a course on handwriting analysis, but there is a much easier way to do this. Hold the receipt and card upside down, one above the other. By holding them upside down you stop “reading” the letters and see it just as a series of lines. Compare for similarities/differences.

Credit cards have other security features, but those are the basics that are the easiest to look for. Each company has material you can order for more detail:

Visa

MasterCard

American Express

Checks

Personal checks have a few ways they can be made into bad checks. The first thing you want to do is avoid taking any starter checks. These are checks that a bank issues when an account is first opened and has the highest likelihood of being bad. It is not uncommon for thieves to open an account, get a pack of starter checks, close the account and start spending.

If there is a name and address on the check, write the persons phone number and Driver’s License number along the top. While you have their license, make sure the address matches the one on the check. If the two don’t match but the name does, they may have moved recently. If the name isn’t a match, that is a definite red flag.

Look at the MICR numbers at the bottom of the check. If any are missing or seem altered, don’t accept the check. You can also run your fingers over these numbers to feel for alterations.

Lastly, the signature line isn’t really a line. It is actually very, very fine print. Most printers can’t make characters that small, so if this line looks like just a solid line, it is probably fake.

Cash

The most common method of payment also has the most security features built in. The easiest way to spot funny money is by getting a counterfeit marker from somewhere like Staples. Swipe it onto the money and it will tell you if it is fake paper or not.

Now, the reason why I said it will tell you if it is fake paper is because something thieves will do to trick these markers is bleach $1 bills and reprint them as higher denominations, usually $20’s (they are the most commonly counterfeited bill).  Other things you can do is look for definition in the print- a lack of definition is a good indicator of a counterfeit bill. Also, there are water marks and plastic strips in the bills that most of us know about.

There is a pretty good list of things to look for in bills Here.

Techniques

A couple of techniques counterfeiters will use is to bring you a fake bill and ask you to make change for it. They might also start with a small purchase with legit money to see if you are checking, then make a bigger purchase with counterfeit money.

Counterfeiters of all types like to work in pairs. One will try distracting you, trying to make you pay less attention to the transaction taking place with their partner.

This is a bit on the long side, but there was a lot to cover. Hopefully you never encounter any of these potential counterfeit issues, but if you do, at least you can rest assured that you knew what to look for 🙂

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One comment on “Fraud Protection

  1. Melissa
    November 17, 2008

    This was very helpful! Thanks for putting this together.

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This entry was posted on November 16, 2008 by and tagged , .
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