When you think about credit card crime, big companies like Target and Equifax probably come to mind. As a small restaurateur, the potential that your business could be the next victim may be less than a blip on your radar. Sadly, eateries are extremely vulnerable to fraud and data breaches, and it is in your best interest to learn how to minimize the chances that you will be harmed.
Why are restaurants vulnerable?
To understand why criminals often target food establishments, you need to cast your mind back to the era of magnetic strip cards. You know the type, the ones that had a readable stripon the back that contained all of a customer’s data. These could be easily copied and cloned, making fraud run rampant.
Then along came the chip or EMV card, which contains encryption technology. Thanks to its higher security capabilities, it is much harder for one of these cards to be hijacked. However, switching over to EMV requires businesses, including restaurants, to upgrade their point-of-sale (POS) solutions with a chip credit card reader. For any number of reasons, many food establishment owners never got around to making the switch.
What they may not have realized is that their procrastination has now made them liable. If a customer comes in with a fraudulent card and you process it by swiping on the magnetic strip, you will be expected to pay out of your own pocket for everything that customer bought. The financial institution backing the card has absolutely no liability whatsoever if you have not upgraded your equipment.
Upgrade your payment equipment
With this in mind, it should go without saying that one of the first and most important steps you can take to minimize your chances of becoming a victim of credit card fraud is to upgrade your payment hardware and software. While the upfront cost of doing so may seem daunting, it is small potatoes compared to what you might pay over time if you leave your business open to hackers.
Furthermore, ensure that your payment processor uses tokenization. This technology stores the customer’s credit card data securely off-site, replacing it with a unique set of numbers and letters that cannot be traced to the original credit card number.
Accept mobile payments.
With each passing day, more customers are embracing the digital wallets that are built into their smartphones. Once customers enter their credit card data into these convenient apps, it is securely stored and encrypted. That way, when they make a mobile payment by placing their smartphone near your NFC contactless payment credit card reader, a secure and encrypted transaction takes place without a cashier ever coming into contact with the customer’s card. This type of payment is made even safer by the fact that smartphones already have measures built in to protect against hacking. In the end, both the customer and the merchant win.
The importance of checking for identification.
It may seem like an extra step that takes more time than it’s worth, but confirming the identities of customers at the register could save your bacon. For customers you do not know, train your counter staff to always verify that the name on the credit card matches that on the person’s driver’s license. Remind your employees to inspect the patron’s signature on the charge receipt, comparing it with the one on the back of their credit card. Keep a resource book handy near the register that shows all the card types you accept with clear pictures of exactly what each type of card should look like. If something does not look right, politely request that the customer use another method of payment or pay with cash.
Keep your staff honest.
We all want to believe that the people we hire are unfailingly ethical, but that is not always the case. Keep your employees from being tempted to perform crimes by placing your POS credit card reader in clear sight. That way, any would-be criminals will have a much harder time swiping a card through a skimmer device since everyone can see the entire transaction from start to finish.
Run reports regularly.
Your new POS device is more than a payment processor; it also gives you a streamlined, seamless way to generate daily audits and other reports. When you regularly monitor the number of individual transactions compared to the batch balance, you’ll be able to pick up on red flags that can tell you when unscrupulous employees are paying themselves unauthorized tips and carrying out other kinds of fraud. Being vigilant in this way also enables you to catch inconsistencies early.
Pay attention to red flags.
You might be excited when you learn that a mysterious customer has ordered hundreds of dollars in food that is to be delivered or picked up. Sure, the entire transaction might be legitimate, but be careful. Check the customer’s ID before providing any food since there is a chance that the credit card is stolen or fraudulent.
Train your staff.
The busier your restaurant gets, the more harried and distracted you and your workers can become, thus setting up the perfect environment for a fraudster to take advantage of you. Of course, you can never totally eliminate the possibility of credit card malfeasance, but providing thorough training to your staff can help them to keep a level head even during the craziest rushes. Take time to show your cashiers how to help customers dip or tap their EMV cards; the fewer cards that are swiped, the lower your potential of being found liable for fraud. Remind your staff of red flags such as mismatched signatures, incorrect first digits on credit cards, and the customer’s unwillingness to provide their identification when requested. Develop clear guidelines to help your staff determine what the next steps should be if they suspect a problem.
Now that you know that restaurants are no strangers to credit card crime, isn’t it time to take some corrective steps for your establishment? You’ve spent countless hours making your restaurant a place you can be proud of, so don’t allow thieves to ruin it all by stealing your profits and besmirching your reputation. Taking preemptive action is one of the best ways to protect yourself now and in the future.