Credit Card Fraud at Hotels: How to Stay One Step Ahead?

Credit Card Fraud at Hotels: How to Stay One Step Ahead?

As the hospitality industry increasingly embraces digital technology, online payment systems have become a critical component of hotel operations. However, this reliance on digital transactions also exposes hotels to a rising threat: online payment fraud. 

Of the major online payment frauds, credit card fraud is a real concern for hotels as these are the most commonly used mode of payments.

According to Forbes, Indian banks reported 14,483 scam cases involving INR 2,642 crore during April-September 2023-24, up from 5,396 cases involving INR 17,685 crore in the same period a year earlier.

But the good thing is that there are certain steps that you can take to protect your hotel business and guests at the hotel.

In this blog, we’ll walk through 5 simple ways to safeguard your hotel against credit card fraud. Let’s dive in and arm ourselves with the tools needed to keep your operations securely.

What Is Hotel Credit Card Fraud?

Credit card fraud happens when someone uses another person’s card information without permission to make a payment or reservation. This can happen in several ways:

  • Card Not Present (CNP) Fraud: A common type where fraudsters steal card details (number, expiration date, CVV) to book your hotel rooms or services online without  the need of a physical card.
  • Physical Card Theft: When a thief steals a guest’s card or wallet and top-up charges during their stay.
  • Account Takeover: Using stolen personal and card information, fraudsters gain access to a guest’s account and make unauthorised charges.

By recognising these fraud types, you can better spot the issues and take action.

5 Proactive Ways to Combat Hotel Credit Card Fraud

1. Verification at Check-In

Proper verification while guest check-in at your hotel is a key defence against credit card fraud:

  • Always request a government-issued photo ID (Adhere card or Driving licence) that matches the cardholder's name on the reservation they have done.
  • Even with digital check-ins (Via OTAs or Your own website), require clear photos of the guest’s ID and credit card.

This step helps prevent unauthorised use of stolen cards and ensures a secure guest experience at your hotel front desk.

2. Maintain Accurate Records

Keeping detailed records can help identify fraudulent activities:

  • Ensure guest information is entered accurately during check-in at your hotel property management system or any other platforms to use to maintain the details of your guest.
  • Save transaction records digitally, but consider keeping physical copies for high-risk cases.

By maintaining accurate records, you can trace transactions and respond quickly to fraud.

3. Clear Anti-Fraud Policies

Create straightforward procedures to handle suspicious transactions:

  • Train your team on how to identify and respond and report potential fraud.
  • Ensure policies are accessible at check-in points to help staff make quick decisions.

Well-defined policies empower your team to spot fraud early and act accordingly.

4. Descriptive Credit Card Descriptors

Use clear, descriptive language for credit card transactions to prevent confusion and disputes:

  • Make sure the hotel name and location are clearly indicated on credit card statements.
  • Regularly review and update descriptors to match current services.

This simple step helps guests easily recognize their charges, reducing the likelihood of fraud claims.

5. Regular Financial Review

Frequent financial reviews help you spot irregularities early:

  • Conduct regular audits and monitor financial reports.
  • Work with financial professionals to ensure everything is running smoothly.

Financial reviews allow you to address concerns before they become major issues.

Conclusion

Credit card fraud in the hotel industry is a growing concern, but with the right preventive measures in place, you can stay one step ahead. By securing your payment systems, training your staff, and using trusted solutions like RunHotel you’ll create a safer environment for both your business and your guests.

RunHotel, one of the best hotel management software, offers secure and streamlined payment solutions and hotel PMS software to keep your hotel safe from fraud. Whether you need to accept payments directly from your website or share payment links with guests -RunHotel is your one stop solution for everything.

Stay vigilant, and your hotel will be better equipped to handle the challenges of modern financial threats.