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How_to_Protect_Your_Online_Store_from_the_Internet_Burglars_Part_2
| How to Protect Your Online Store from the Internet Burglars, Part 2
Thanks for joining me for Part 2 of this important article about
how to save your store from online thieves.
Here's a scenario that will help you identify who is savvy to
credit card fraud and who is not.
Let's say that John Smith runs an Internet store that sells
books. 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 a
computer parts store called Laptops 4 U. The owner of Laptops 4
U is aware that his merchandise is THE HOTTEST ITEM to steal on
the Internet. (besides credit card numbers, of course) John
Smith puts his feet, turns on the satellite TV, and lets the
Internet run his business silently.
John Smith gets a sale on his online store. The order is for 300
books. John loves the way the Internet allows his business to
pretty much operate on autopilot. He knows that the 3rd party
vendor he uses to take all his credit card sales took care of
it, so all he has to do is print an invoice and pack it up. Off
he goes with the merchandise to the post office, marveling at
his 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 his
credit card processing. He just has a store that uses Secure
Socket Layer, then it emails him with a link that he clicks on
to take him to his orders. Joe Black's process takes a lot more
administrative work, but he feels in control of his business. He
really wants to be aware of what goes on every minute. Joe, or
whoever 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 up
the phone, dials the number on the order. "Mr. Jones, hi, my
name is Angela. I work here in the customer service department,
and we are verifying your order from our online store. To
protect your security could you tell us if you ordered items
from our online store today, and if you did, could you please
provide us with some verification of your order. We WANT TO
PROTECT YOU. Could you please give us the 800 number on the back
of your credit card and your bank's name?" Customer: "Uh, who
are you trying to call? This is the roller skating rink in
Topeka, Kansas." Angela thinks that perhaps the person who
ordered just mistyped the phone number. She gets out her list of
merchant phone numbers and calls up Mastercard. "Hello, My name
is Angela, and my company is Laptops 4 U. We are a merchant on
the Internet, and we need to somehow verify that a card number
used on our online store was not stolen." Mastercard happily
gives her address of the cardholder and other information that
tells Angela that her company could have lost a laptop and
possibly their merchant account when the credit number does not
go through the system.
......the transaction stops RIGHT THERE. Go no further. (this is
not a totally untrue story...happened to us in a similar
situation)
John Smith gets the statement from his Merchant Account provider
about a month later. He has sold about 1,000 books this month.
His books are a real hot item! Two days later, John Smith gets
another letter from his merchant provider. John's merchant
provider, like many, automatically deposits or deducts credit
card transactions from his checking account. After John got the
first statement, he gave most of the profits to his wife so that
she could go down to the A&P superstore and buy some food. She
also decides they need a new living room couch. The money's
spent. The 300 books that someone ordered, well - they were
ordered on a stolen credit card number. Did John or his
automated online store merchant know this? How could they? The
owner of the credit card did not know their number and
expiration date had been lifted from a store somewhere on the
Net. John is out 300 books and $4,485.00 in revenue. He also
receives a threatening notice that if this happens again, he'll
lose his merchant account.
------------------------------------------ Did you notice
anything strange about the merchant account provider taking the
money 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 debt to the merchant
account provider, and some nimrod is off selling his books in
some 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 company
specializing in promoting websites for new owners, building
affordable e-commerce sites, and providing reliable web hosting
solutions as an affiliate of Virtualis Incorporated.
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