Dealing with fraud is an unfortunately prevalent part of doing business in the aftermarket parts industry. How much it affects your business comes down to how well you are educated on the types of scams in the market and how well prepared you are to identify and stop potential losses from fraud.
Here is a quick overview of some common scams and how we at ACTParts have been able to reduce our losses.
Stolen Credit Cards
Using information hacked from financial institutions, perpetrators are able to fool sales reps into thinking a sale is legitimate by providing a valid credit card number which authorizes for payment when entered. Once the real card holder disputes the transaction, the seller will be held liable for the total amount in addition to the cost of lost inventory.
Ways to protect yourself:
- Sales reps should demand a faxed copy of both the front/back of the card as well as a government issued ID
- Credit managers should verify the legitimacy of the card’s use with the card issuer before any transaction is finalized