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How to detect in-store card fraud


How to detect in-store debit & credit card fraud

Essentially, in store card fraud is when someone uses another person’s credit or debit card or account information to make an unauthorized purchase. In today’s world, you’d think this is only carried out online but that’s not the case. It happens in brick and mortar stores too, therefore, it’s vital businesses detect and prevent credit & debit card fraud should it arise. Especially with cash payments continuing to decline across the UK and card payments rapidly increasing. 

In-store card fraud can have a huge impact on businesses and be extremely costly. So how can you spot the signs of in store credit & debit card fraud, prevent it, and how do you go about reporting it? 

Warning signs of in-store debit & credit card fraud

In order to prevent in-store credit & debit card fraud from happening it’s important businesses look out for the warning signs and take on board the following:

Suspicious shopper behavior:

  • Appearing nervous, agitated, or rushed

  • Purchasing a random selection of high value goods

  • They keep looking at the signature on the back of the credit card whilst they sign?

  • Distracting the cashier from checking the signature?

  • They tell the cashier that they are having problems with their credit card requesting them to call a phone number for a “special” authorization?

Suspicious credit cards

The majority of credit cards have features that are consistent, so if you think one may not look quite right, it might be worth checking the following: 

  • Are the characters the same size, height, and style?

  • Are the characters properly aligned?

  • Is there a damaged hologram?

  • Does it have a magnetic stripe or a chip?

  • Has the signature panel been altered?

It’s worth remembering that these signs don’t prove that a transaction is fraudulent but certainly are warning signs.

Suspicious transactions

Certain products like jewellery, computers, cameras, shoes, clothing etc are more likely targets for credit card fraud. The main reason being that they are easy to resell. 

How to prevent in-store debit & credit card fraud

Here are six ways to prevent in-store debit & credit card fraud that will help protect your business.

1. Be transparent with your return policies 
Fraudsters tend to exploit the returns process the most as they are the most important part of customer service. Businesses should be transparent with their policies in order to protect all parties. 

Minimizing the risk of return fraud starts with awareness and should be trained to spot it should it happen. 

Often criminals use a discarded or stolen valid receipt as a shopping list to find items in a retail store and return them for a refund. Alternatively, they make a purchase, leave the shop with the item and then return to the store immediately with the receipt and pick up another item off the shelf, which is exactly the same and ask for a refund claiming that they’ve had a change of heart.

2. Look out for physically damaged cards
Fake cards are often altered intentionally as the criminal wants the cashier to  bypass their anti-fraud features. Ideally, you should ask for another form of payment or decline the transaction. Do not manually enter data from a damaged card.

3. Call your payment processor if a transaction appears fraudulent
Payment processors always monitor your transactions for fraudulent activity, in order to look out for suspicious payments.

If you feel a transaction isn’t ‘right’ for your business you should  give your processor a call immediately, especially if you are taking large sums of money. 

4. Don’t be made to do something if you don’t think it’s right
Your staff should feel confident to always make sure the correct procedure is followed when authorizing purchases using credit or debit cards. If you are made to do something that isn’t right, then that’s a warning sign! 

5. Only accept payment from the person whose name appears on the card. 
If you accept payment without validating ID, you may be liable for any chargeback, in case of fraud.

Merchant chargebacks is a term used to describe when a customer’s card issuer disputes a transaction on their behalf. Once this has happened the issuer will reverse the payment, refunding the total amount to the customer’s account. 

Being aware of this and taking time to check will save you a lot of time and money. 

6. Call a ‘Code 10’
If you have doubts about a transaction, you can call in a ‘code 10’ to your payment provider. This allows you to request authorization discreetly. If your provider sees something suspicious, they will then deny the authorization. You can call code 10 if you think a card has a missing or altered security feature or fail to have essential elements like the card number.

Additionally it’s also worth considering the following: 

  • Only accept EMV chip and pin card payments with your card machines

  • Only accept authorised cards which are AVS verified, a standard which is supported by all of the major cards including Visa, Mastercard and American Express.

  • Become PCI DSS compliant and make sure both you and your employees are trained on how important it is to protect your customer’s data 

  • Only use card machines with end-to-end encryption or point-to-point encryption. (This is part of your PCI compliance) 

What should you do if you suspect in-store card fraud?

So what should you do if you suspect in-store card fraud?

  • Remain calm while keeping the ‘customer’ at the till for as long as possible

  • Check for ID from the customer

  • Check too for any noticeable counterfeit qualities such as a damaged magnetic strip or no hologram stickers

  • Ask the ‘customer’ questions to find out more about the origin of the card

  • Ask the customer for a signature

If you’re convinced the card being used is fraudulent, it’s worth making a Code 10 authorisation to check with the issuing bank. 

Details can be found in the Code 10 section of the UK Cards Association guide.


Accepting card payments does put you at risk of instore fraud. However, if you have high levels of security in place and you take note of all of the above you can minimise the risks substantially.

Here at Opayo, we offer a number of payment processing solutions which are all PCI DSS Compliant and can help to detect in-store card fraud. For further information on how we can support you and guide you through the process all us now on 0191 313 0300