Gas stations lose billions of dollars annually to fraud, causing businesses with an already tight margin to risk earning a profit. As a company that supports gas station and convenience store franchises, we’ve seen firsthand the types of fraud that can expose our clients to debilitating financial loss. To prevent your business from experiencing lost income, we’ve outlined the most common types of gas station fraud and how to spot them, including how to spot a credit card skimmer. Read on to learn more.
Gas Pump Tampering
The Federal Trade Commission provides critical advice on how to spot a credit card skimmer. With gas pump tampering, a fraudster will place a voided label across the pump panel, the seam between the credit card reader and screen demonstrating the gas price. A credit card skimmer, which looks like a few-inch-long rectangular attachment, will be secured to the gas pump’s card reader.
Without intervention, your customers unknowingly will insert their credit cards into the credit card skimmer. The result? The fraudster now has your customer’s data to potentially commit future fraudulent payments.
To protect your customers from gas pump tampering, ask your gas station and convenience store employees to routinely check the seal on all pumps and inspect the credit card readers on each pump.
Suspiciously Large Purchases
The merchants we work with have reported several instances of fraudsters purchasing hundreds or thousands of dollars worth of cigarette cartons. The fraudster presents a credit card without a functioning chip during the purchase. Since the EMV reader cannot accept the purchase, the gas station employee typically will ask the fraudster to use the magnetic stripe.
Your system’s payment processing software accepts the payment through the magnetic stripe, which unbeknownst to you or your employee, comes from a stolen credit card. When the actual owner of the credit card reports the fraud, the gas station owner is responsible for the chargeback.
To stop chargebacks from fraudulent magnetic stripe purchases, don’t allow your employees to accept cards without a functional EMV chip. Instead, have them request a separate form of payment.
Manual Credit Card Entry
A fraudster will attempt to make a purchase. Neither the EMV reader nor the magnetic stripe will work. The gas station employee then manually enters the card number, which completes the purchase. In this instance, not only has the fraudster gotten away with theft, but your gas station is liable for a chargeback on the fraudulent purchase.
Train your employees to never accept a credit card with a non-operational chip and magnetic strip and prohibit them from entering credit card numbers manually.
Learn How to Spot a Credit Card Skimmer. Schedule Your Consultation with Financial Fuel Services Today.
Financial Fuel Services helps to guide franchise owners of gas stations and convenience stores through the challenges of vendor relationships, Point of Sale configurations, and EMV credit card processing. As part of our commitment to our clients, we want to keep you informed about gas station fraud and how to spot a credit card skimmer. To learn more about our payment processing services, schedule a consultation with our team today.