PayPal Here: Help protect yourself against credit card fraud.

Apr 10 2018 | PayPal editorial staff

Learn point-of-sale tips to help protect against credit card fraud.
Although PayPal works aggressively to help prevent fraud, it’s still important for you to know how to help protect your business.

Why fraud prevention is important.
  • If you received a fraudulent payment, you could be held financially responsible for the loss.
  • Nobody knows your business as well as you. You know your biggest customers and are familiar with their buying patterns. Because no payment processor will ever surpass your knowledge in these areas, your involvement in fraud prevention is essential.

Learn how to help protect your business.
Swipe the card. The best way to help protect yourself against fraud is to swipe the card through your PayPal Herecard reader instead of manually entering the card number. Swiping cards reduces your chances of fraud since the magnetic stripe includes built-in security features that are not available for manually entered transactions.
  • Phone payments: If you typically accept payments over the phone, Virtual Terminal may be a better choice for your business. It was specifically designed for businesses that take payments over the phone, fax, or mail order.
  • Keyed and scanned payments: When you manually enter card numbers, the transaction fee is slightly higher and payments that you receive may not be available right away. To help protect yourself against fraud, enter the customer’s zip code.
Verify the signature. Make sure the customer’s signature on the sales receipt matches the card signature and the name on the front of the card.
  • No signature: If the card isn’t signed, ask for a driver’s license or other photo ID to help verify the customer’s identity. Next, ask the customer to sign their card. The name on the ID should match the name on the card.
Ask for driver’s license or photo ID. If a customer is placing an unusually large order or you suspect that a card might be fraudulent, ask for the customer’s ID. The name on the photo ID should match the name on the card.
  • No driver’s license: Ask the customer for another form of ID. If you can’t afford a potential loss and the order seems suspicious, consider declining the sale.
  • Photo ID doesn’t match: If the name on the ID doesn’t match the name on the card, consider declining the sale. For your safety, stay calm and don’t tell the customer that you suspect fraud. Instead, just let the customer know you can’t accept the sale.
Post your return policy. Post your return policy in a visible place in your store so customers can read it before they pay for their orders. Also include your return policy on the sales receipt. If you’re using the PayPal Here app, you can include your return policy on your printed receipts. To set this up, just go to your app Settings and select “Printing.”
  • Invoice: If you don’t have a physical store, you can include your return policy on your invoice. The invoice should also include the date, description of the item or service, number of items purchased, amount, and customer’s signature.
Verify your credit card statement name. Make sure customers can recognize your business name on their debit or credit card statements. If customers don’t recognize a charge on their statement, they may think that the charge was fraudulent and open an unauthorized chargeback. Verify your credit card statement name.

 
The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial, and legal advice before making any business decision.

Frequently asked questions.

There’s no backup funding for the PayPal Cash Card. The PayPal Cash Card uses money available in your PayPal account.  If there’s insufficient money in your PayPal account to cover the amount of a purchase, that purchase will be declined at the point of sale.

We want to help you avoid fraudulent transactions and protect your business. This is important because you may be held financially responsible if you accept a stolen credit card.  Here are a few tips to help you avoid transaction problems. 

Before a Sale

  • Include a clear return policy on your receipts and invoices. 
  • Create a recognizable card statement name. A customer who doesn't recognize your business name on their card statement may contact their card issuer because they think that the charge was unauthorized. On a card statement, your business name will appear next to the word "PAYPAL*." Go to your Business Profile to add a return policy to your receipts and update your card statement name.

During a Sale

  • Enter a description for each item that you sell. 
  • Verify the customer's name and signature if you use a card reader. If the card isn't signed, ask for a photo ID. The name on the ID should match the name on the card. 
  • Swipe cards with your card reader. The magnetic stripe has built-in security features.  
  • If you manually enter a card number, make sure to enter the customer's valid billing zip code. 

After a Sale

Keep good records. Hold on to receipts, invoices and other documentation from your sales. Chargebacks can be filed months after a transaction and you'll need documentation to respond to any claims.

Manually Entered Cards

In general, manually-entered card payments have a higher incidence of fraud because the cardholder doesn't necessarily have to be there for the transaction to take place.  Because of this, the transaction fee is slightly higher and payments might not be available for withdrawal right away. We recommend that you swipe cards with your card reader because the magnetic stripe on the back of a card has built-in security features. If you don't have a card reader or you have to enter a card number for some other reason, it's important that you make sure that the customer owns the card.  We recommend that you: 

  • Ask for photo ID if the card isn't signed. 
  • Have customers sign for all purchases, big and small. 
  • Make sure that you enter the customer's valid billing ZIP code. 
  • Itemize sales and enter a description for each item that you sell.
EMV is a global payment system that entails putting a microprocessor chip into debit and credit cards, making them less vulnerable to fraud for in-person transactions. Because EMV uses better data security, this standard is being adopted in the United States. In addition, most debit and credit cards will be reissued with EMV chips by October 2015.

The PayPal Chip Card Reader is now available for purchase and can be used to accept payments from chip cards, swipe cards with magnetic strips and contactless NFC.

Get the new PayPal Chip Card Reader  here.

 
There are no annual or monthly fees associated with the PayPal Cash Card.  All fees associated with the card can be viewed on the PayPal Cash Card fees overview site. There are no overdraft fees.  The PayPal Cash Card uses money available in your PayPal account.  If you have insufficient money in your PayPal account to cover the amount of a purchase, that purchase will be declined at the point of sale.  Also, there’s no fee for withdrawing cash from over 25,000 MoneyPass ATMs across the country.