A couple of nice references when your gut makes you think you might be dealing with a potential scammer.
Educate yourself:
http://en.wikipedia.org/wiki/Internet_fraud
http://www.craigslist.org/about/scams
http://www.snopes.com/
Prompted by a client that I think might have a “potential customer” who may be trying to pull the reshipping scam:
http://en.wikipedia.org/wiki/Internet_fraud#Re-shippers
Drawbacks to each type of payment:
- Checks : bounced If you decide to accept this method of payment and are uneasy about the customer, require a waiting period to match your bank’s cleared check policy. Typically 7 days. Your bank will probably also charge you a bounced check fee between $20-$40 if this happens.
- Money Order or Cashiers Check: Fakes Like checks, Money Orders and Cashiers Checks may appear to have cleared with the bank only to come back and bite you.
- Credit Card or Paypal: Chargebacks Someone is paying with a credit card, that isn’t fool proof either, the buyer can do a chargeback: http://en.wikipedia.org/wiki/Chargeback
- Cash: Counterfeit You can get a Counterfeit money pen for around $4 or take the money to the bank for confirmation: http://www.staples.com/Dri-Mark-Counterfeit-Money-Detector-Pen/product_450130
Consumer reports has a more thorough run down of each type of payment and some additional options for accepting payment that might be useful: http://www.consumerreports.org/cro/money/consumer-protection/counterfeit-currency-and-checks/overview/index.htm
Red flags can include:
- Unusual or unusually large order
- Out of country shipping
- gmail address (or yahoo or aol … anything easy to sign up for)
- business address is an apartment or house or PO Box
- when searching online for the person’s name and/or business name, nothing comes up
- Asking you to take payment for more than your invoice and then pay another company / shipper for something (this one is more than a flag.)
- No BBB record, no Dunn and Bradstreet record, no record of the business registered in the city of their address
Most of these alone do not mean that the business is not legitimate but the more red flags you have, the more cautious you should be.
There are times when you just have to pass on the business if it’s not worth the risk and there are too many red flags.