POS fraud prevention Archives - Copperstate Restaurant Technologies

February 17, 2015

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The Wagon Wheel: Restaurant Employee Theft Prevention

Are you familiar with all of the ways employees can steal from restaurants and bars? According to the National Restaurant Association, theft and fraud amount to 4% of industry sales!

One of the most common is through a trick called “The Wagon Wheel.” How does it work? A server starts a tab with a sandwich and a coke. If the customer pays in cash, then the server goes into the POS system and transfers the coke off the check and closes out the tab to just the burger and pockets the cash.

Then, the next time someone orders a coke and the server starts the ticket on that tab, ultimately transferring off the coke to another tab and pocketing the cash once again.

The server is usually using frequently ordered items like soft drinks, especially too because they are servicing their own beverages.

Bartenders can do the same with alcoholic beverages as well since they are the ones preparing their own orders.

How can you protect yourself from this method of theft? Advanced POS systems will have monitors and controls in place to monitor suspicious behaviors and patterns such as low sales of server-controlled items over a period of time.

MICROS, for example, has an alert manager which can send push notifications to your phone when these things are happening. Or, you can pull the audit and analysis report to see marked areas of concern. One way to prevent it altogether is if the system will make an item transfer impossible without the authorization of a manager.

Need help with protecting your business against this kind of theft? Contact us today for a quote! (480) 603-3020

February 9, 2015

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Part 2, More Fraud Prevention Tips for POS

A continuance of our tips from last week from Mercury:

Merchants should attempt to swipe every card through a POS terminal. If the terminal cannot read the card, merchants should take a manual imprint of the card. When using a manual imprinter, merchants should check the draft for a clear impression of the card to ensure that they have captured the embossed card account number. Merchants should also complete the draft with the date, description of merchandise/service, sales tax, total dollar amount and authorization number, and get a signature.
Merchants should never allow customers to tell them how to “get the transaction to go through” (for example, by doing a ticket only transaction without getting an authorization). This will result in a chargeback, and these customers will have “stolen” or obtained items for free.
Merchants must obtain customers’ signatures. The signature on the draft must match the signature on the back of the card.
If a customer’s card is unsigned, merchants should request another form of identification with a photo and signature. Merchants should request that the customers sign their cards and then compare the two signatures. If customers refuse to sign, merchants should inform them that they are unable to accept an unsigned card for payment and then request another form of payment. The card association rules dictate that card acceptors must not complete the transactions if cardholders refuse to sign the card. Visa, MasterCard, and Discover’s websites provide materials designed for merchant use and offer tips on what merchants can do to prevent fraud.
Use caution when taking an overseas order. Fraudulent transactions that originate overseas are on the rise. Remember that international transactions are high-risk transactions. Know your customer. Properly identify the person with whom you are dealing. Take a second look at what is being ordered and where it is being shipped. Did your customer offer you multiple cards as payment? Is the customer asking for immediate shipment? If so, you may have just detected a fraudulent transaction and saved yourself from taking a loss. There is a tremendous amount of fraud with international transactions, and it is virtually impossible to win the chargeback case. Banks outside the U.S. may not support additional security features like AVS, CVV2, and Verified by Visa. If in doubt, do not hesitate to contact Mercury and we will be happy to assist you.
Utilize security functions such as entering the “last four digits” of the card on swiped-card transactions and Address Verification and CVV2 code to discourage use of counterfeit cards. Verified by Visa and MasterCard SecureCode are payment initiatives designed to reduce the risk of unauthorized use of cardholder account by authenticating the cardholder attempting to make a purchase online. Authentication makes internet shopping better and safer for both buyers and sellers by reducing the merchant’s exposure to fraud and frivolous disputes, and protecting the cardholder from fraudulent use of his/ her card. Implementing Verified by Visa shifts liability away from the merchant and onto the card issuer.
If you are going to run an unusually large transaction, or if you need to manually key numerous transactions when you usually swipe your credit cards, call ahead to let Mercury know what you are doing. Otherwise, your account may be flagged for unusual and suspicious activity, which may cause your funds to be held.

February 4, 2015

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Part 1: 6 Tips to Prevent Fraud at the Point of Sale

Thank you to Mercury for sharing these important tips for preventing fraud at the point of sale!

If a photograph of the cardholder is present on the card, merchants should compare the photograph on the card with the person presenting the card.
Merchants should check cards for the hologram. A hologram is a three dimensional symbol in either gold or silver foil that is designed to help deter counterfeiting. The image should reflect light and appear to move when you tilt the card. NOTE: The Visa hologram is an image of a dove; the MasterCard hologram is an image of a world map; the Discover hologram has four distinct images.
Merchants should check cards (including the signature panel) to see if they have been altered.
Merchants should check the valid date (some cards are not valid until the date shown) and the expiration date on the face of the card. If the card is not yet valid or expired, the card acceptor should not accept the card and should instead ask for another form of payment. NOTE: Cards are valid through the last date of the month, unless an exact date is displayed.
For each card type, merchants should be aware of the first four digits and the total number of characters. NOTE: A Visa-branded card number begins with a “4” and has 13 or 16 digits; a MasterCard-branded cardnumber begins with a “5” and has 16 digits; a Discover card number begins with a “6” and has 16 digits. Merchants should check the first four digits of a card. For Visa and MasterCard, the first four digits of the embossed card number must match the four digits printed above or below that number on the front of the card.
The account number on the front of the card should match the number printed on the back of the card in the signature panel. For Visa, American Express and Discover, merchants should compare the entire account number imprinted in the signature panel with the embossed account number on the face of the card. For MasterCard, merchants should compare the four-digit truncated account number imprinted in the signature panel with the last four digits of the embossed account number on the face of the card. For MasterCard, merchants must contact their acquirer for instructions if: • Merchants believe there is a discrepancy in the\ signature. • The last four digits of the embossed account number do not match the four digit truncated account number on the signature panel or displayed on the terminal. • The photographic identification is uncertain. If any MasterCard does not have a MasterCard hologram on the lower right corner of the card face, merchants must confiscate the card and contact their acquirer’s Code 10 operator for instructions on card pick-up and mailing.