Merchants find themselves dealing with fraud on many levels including checks, credit cards, and the ever growing popularity of gift cards. Here are a few examples of fraud using these payment methods:
 

Credit Cards:

• Merchandise purchased with lost, stolen, or counterfeit credit cards.
• Merchandise purchased using debit card fraud.
• Fraud artists observe consumers when PIN is entered.

Checks:

• Merchandise purchased with bad, stolen, or counterfeit checks.
• Checks easily produced by photocopier or PC with standard printer.

Gift Cards: 

• Dishonest employees can "launder" gift cards, steal them outright, or switch or convert cards.
• Customer walks away with 0-value card while the employee pockets the card with the monetary value.
• Gift cards given in exchange for returned merchandise have helped perpetrate chargeback fraud.

Facts: Fraud costs U S companies $6.6 billion per year. Chemical Bank of New York reported a 50% increase in fraudulent checks last year. Wells Fargo admitted that transactions involving fraudulent checks rose an alarming 500%.

Solution: The U.S. Department of Justice says to combat business fraud it is advisable to install closed-circuit television (CCTV) camera systems at checkouts. Additionally, use employee training to inform staff of the known methods of check-cashing fraud and illegal card use that involve collusion with sales clerks and inform them of the consequences of participating in such offenses.

Sources: Dan Malachowski, Salary.com / Bureau of Labor Statistics of the U.S. Department of Labor. / Scripps Howard News / National Association of Convenience Stores / Rutgers University / U.S. Department of Justice