The Hardware Man - Credit Card Scammers

Howdy Folks,

The call came in simply enough. A customer on a Saturday, mid-morning, asking if we had a product in stock. They had found it on our website and wanted to see if we could ship it to them.

Our manager, Ed, had taken the call and his Spidey senses started tingling enough to escalate the request to us. The caller had asked for a couple SD Cards for trail cameras that we had on the shelf. Small, generic, but not a normal mover in our store. After checking the caller ID, the area code indicated a Louisiana phone number. Um, no. Sorry. No deal.

These types of calls and interactions are common throughout the retail industry. It was a classic beginning case of wire fraud that has been effective with unsuspecting or eager cashiers happy sell something. Typically, a stolen credit card is recited over the phone for a manual credit card entry, approval is given and the product is shipped out. Eventually, the cards’ rightful owner discovers the fraudulent transaction and the charge is challenged. The store owner not only loses the amount they charged, but the product is also lost. In more drastic cases, the scammer comes back for a double-dip and may want to return for cash or store credit, which multiplies the amount of the loss.

Unfortunately, many retailers fall for tricks like this often, which is why scammers continue to operate. It is why a store must implement policies and procedures that are continually adhered to, no exceptions. While a policy may seem harsh on the surface, the reasons are well justified.

My time spent servicing other hardware stores throughout the country over the years has exposed me to several cases where thousands of dollars have been compromised, some with no recovery possible. I advised a store several years ago about not taking payments over the phone. I believe the message hit home after they were taken for about $15,000 worth of product not once, not twice, but three times. The modius operandi was the same each time. An order was placed for building materials, and a non-English speaking employee was sent to pick it up. Their card wouldn’t work, so they called their boss for payment over the phone. The boss would read the number from a stolen card, and the sale would go through. At that point, the merchandise was released to the customer, but eventually the chargeback from the credit card company would happen.

It is important to emphasize to employees that policies and procedures are critical to the successful operation of a business. These commonly include ‘No Return Without a Receipt’, no manual credit card transactions and tight controls on what individuals are authorized to charge on an in-store account. While this experience was ultimately uneventful, the warning echoes and our tolerance of these types of requests has dropped to an all-time low. If you find your business needing help with some of these issues, feel free to contact us for a conversation.

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Daniel Karns and his wife own Clintonville Hardware & Rental along with other businesses. Join the discussion by contacting him at info@clintonvillehardware.com.