Fraud Prevention Techniques for Card-Not-Present Merchants

Fraud Prevention Techniques for Card-Not-Present Merchants

Instabill works with both card-present and card-not-present (CNP) merchants every day. However, CNP merchants must take extra precaution against fraud exposure and associated losses. Follow our fraud prevention techniques to avoid fraud for CNP transactions and protect your online merchant account.

  • Make sure you obtain an authorization from the cardholder.
  • Verify the card’s authenticity.
    • Ask the customer for the credit card expiration date and include it in your authorization request. An invalid or missing expiration date might indicate that the customer does not have the actual credit card in hand.
  • Look for general warning signs of possible fraud (see below).
  • If you receive an authorization, but still suspect fraud, ask the customer for additional information. Some suggestions include requesting the financial institution’s name located on the front of the credit card and contacting the cardholder with any questions.
  • If the customer cannot provide additional information, then decline the transaction.

11 Signs of Possible Card-Not-Present Fraud from Instabill

There are many ways to swindle an online merchant, and Instabill has been processing credit cards for so long that we feel like we have seen it all. Here are 11 red flag signs that could possibly be cases of card-not-present fraud.

  1. First-time shoppers: Fraudsters are always looking for new victims!
  2. Larger than normal orders: Since stolen credit cards or account numbers have a limited life span, fraudsters need to maximize the size of their purchases.
  3. Orders that include several of the same items: Having multiples of the same item increases a criminal’s profit.
  4. Shipping to an international address: A large number of fraudulent transactions are sent to fraudulent cardholders outside of the U.S.
  5. Express shipping: Criminals want these items as soon as possible for the quickest possible resale and are not concerned about the extra delivery charges.
  6. Shipping to a single address with transactions placed on multiple cards: This could involve account numbers generated using special software or even a batch of stolen credit cards.
  7. Transactions with similar credit card numbers: Knowing this sign is particularly helpful if the credit card numbers used have been generated using software.
  8. Multiple transactions on one credit card over a short period: This could be an attempt to use a credit card until the card is cancelled.
  9. Multiple transactions on one credit card to a similar credit card with a single billing address: This could possibly represent organized activity, rather than one individual at work.
  10. Multiple credit cards used from a single IP (Internet Protocol) address: More than one or two credit cards could definitely indicate a fraud scheme.
  11. Orders from Internet addresses that make use of a free email service: These types of email services do not cost money to use. They also do not offer an audit trail or verification that a legitimate credit card holder has opened the account.


Failing to prevent fraudulent transactions will likely result in chargebacks, which could, in turn, result in your acquiring bank terminating your online merchant account. To secure your online credit card processing services, make sure you are always doing your best to prevent online credit card fraud.

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