Credit Card Fraud sucks. It's designed to. The Banks only care about the card holder, not the merchant. Verification only says the account has sufficient credit available and if it has been closed or stolen - if reported. The problem is many card numbers are stolen and used until the credit line is used up or the card holder reports it.
Merchants that take cards over the telephone or on-line get hit the hardest because they never have the CIF (card in fist). An as such, they pay high processing costs.
We (as a car dealer) never take card purchases without the physical card but even then, we get hit from time to time.
An online merchant should always ask for the security code on the back, and verify the issuing bank by searching here Search BIN Database
In addition, I would ask for a fax copy of the card (front and back) if the amount was north of $500.
Merchants that take cards over the telephone or on-line get hit the hardest because they never have the CIF (card in fist). An as such, they pay high processing costs.
We (as a car dealer) never take card purchases without the physical card but even then, we get hit from time to time.
An online merchant should always ask for the security code on the back, and verify the issuing bank by searching here Search BIN Database
In addition, I would ask for a fax copy of the card (front and back) if the amount was north of $500.