“Never say never” usually holds true in life, but in the case of
handling a MOTO (mail order/telephone order) transaction as a retailer,
you should never wire money to someone.
Let me repeat, because it’s that important. Never wire money to someone as part of a retail transaction.
With the Great Recession of 2009-10 has come a marked increase in the
number of merchants who are being taken advantage of by fast-talking
scam artists who want something for nothing.
The scam usually starts innocently enough. You get a nice size order
for products or services from an unexpected source. The story seems
legitimate and fits your business model.
After the bad guy has set the hook, he suddenly “discovers” a problem
that can be “solved” with the help of you, the merchant. Usually it is
for shipping or for other services; the problem has even been to help
the “customer” with customs (for an international order) or tax
The solution to the customer’s problem is for you to run another transaction and wire the money to another person or company.
These scams are limited only by the imagination of the scam artist
and the gullibility of the merchant. Here are some real-life examples:
• A jewelry store customer requests a custom diamond ring, but needs
part of the purchase price rebated to cover shipping and/or duty;
car dealer customer is interested in purchasing a unique used car, but
needs part of the purchase price rebated to handle the shipping of the
• A granite memorial customer is interested in purchasing a
custom headstone for a dead relative, but needs a portion of the
purchase price rebated to facilitate delivery and installation;
tire dealer customer wants to purchase four racing tires, but wants them
shipped to the racing event and requires a special shipping method;
A B&B owner receives a request to “rent” the entire facility for
executive meetings, but requires the use of an interpreter and needs the
separate services to appear as one transaction for tax reasons.
As you might expect, the person or company receiving the wired funds is a
partner in the crime being committed. The scam artist has no interest
in the actual item or the service, just the wired money.
If you receive an order that follows this track, do not wire money. Ever. Once
you wire the money (via Western Union or similar service) it is gone
forever, because there is almost no way to get it back. The bad guy has
your money, and the credit card transaction will become a chargeback
with you holding the bag.
If you ever have doubts about a transaction, call your help desk.
They have probably seen or heard of the scam before and can offer sound
advice. Remember, a sale that turns into bad debt is not a sale, it is
just bad debt.
John Mayleben, CPP, is RPN senior vice president technology and new
product development and a national expert on electronic payment
processing. Contact John at firstname.lastname@example.org.