As you know, the merchant is always liable for fraudulent orders.  It is YOUR responsibility to verify that the order placed was paid by with a credit card owned by the person who placed it.  Your agreement with the credit card company does not put them in a position of any liability.  Consumers are protected by law and it is your responsibility to PROVE that the order was placed by the credit card owner, and shipped to, and received by, that person or to an address he/she requested the order to go to.

We are VERY careful to verify that ALL overseas orders are valid. Since AVS verification does not apply to overseas addresses, we do this by crediting a random amount between $.50 and $3.00 back to the client's card.  We e-mail them telling them that we will do so and they will be required to check with their bank to see what amount was credited. They should then e-mail us back with the correct amount and we will ship it. 

It does add about four days to the order completion process, but we have uncovered countless fraudulent orders, and authentic customers have never complained about the delay (they already expect to wait at least a week before they receive the order anyway).   In fact in our experience they are quite happy with the extra protection provided by our system (it could just as easily have been their card).

We have found that it is not enough to simply make sure that you receive a valid authorization before sending the merchandise, because there have been instances where the fraudulent order comes in on a little used card, or the card itself was not stolen but the number was.  In either of these cases there may be a delay on the card being reported missing.  If this occurs it is YOU the merchant who will eat the charges - not the customer - not the credit card company.  You will also eat the shipping charges which could be substantial on overseas orders.  In this case it really pays to be careful.

Other ideas include requesting the credit card company/Bank phone number to call and verify.  You may also request a copy of the front and back of the credit card faxed to you along with a copy of a picture ID.  We still prefer the method outlined above as we have never had a problem with it before. 

Make sure that you setup your real-time credit card processing to authorize only, then if you deem the transaction legitimate you can let it proceed and settle.  You will save unnecessary expenses and hassle. If you are processing offline (simple validation), simply wait till you sort the transaction out before you charger the card.

Click Here for telling signs of fraudulent orders.  Please note that many of those "signs" showed on perfectly legitimate orders and are therefore not conclusive but merely suggestive. 

Note:  For tips on how to find the issuing bank of a credit card click here.