Selling gift cards, memberships, and packages online, while convenient, can open your business to fraudulent activity. This is an unfortunate, universal reality for all digital payment processing platforms.
Mangomint's payment processing is powered by Stripe, one of the most trusted and secure payment processors available. Every card entered into the system—whether manually or online—runs through security checks before it can be charged or stored. However, no payment processor can guarantee full protection from fraud in every scenario.
Below are some tips on how you and your team can protect your revenue from potential scams.
What are the four common types of online payment fraud?
Stolen card use: Someone uses a stolen credit card to buy a gift card or save a card on file for a booking. Because they have the card details needed to pass security checks, the charge may not be flagged at first. You may not know the card was stolen until the real cardholder disputes the charge.
Friendly fraud: A real client pays with their own card, receives the service, then disputes the charge with their bank as unauthorized. It's hard to catch ahead of time because everything about the sale looks legitimate. If your business name on a client's statement doesn't look familiar, the bank may hear about it before you do. In Mangomint, you can set a recognizable statement descriptor and add your contact details to receipts, which gives clients an easier way to reach you first.
Account takeover: Someone gets into an account that isn't theirs. That could be a hacked payment account with a new bank account added for payouts, or a person using another client's membership or package credits.
In Mangomint, only Admin users and team members with the Can manage payment accounts permission can change the bank account that receives your payouts. Keep that permission limited to the people who need it.
Refund scams: Be wary when a client who paid by card pushes for a refund through Venmo or Zelle instead. A refund sent that way never appears on the card, so the client may still be able to dispute the original charge and claim they were never refunded. If the dispute goes their way, you've paid them back twice. We strongly recommend refunding to the original payment method.
Note: Holiday gift card rushes can bring a wave of online orders, which makes a suspicious one easier to miss. Check your online sales notifications more often during your busiest gift card weeks.
Red flags to watch out for in online sales
None of these signs proves fraud on its own. Take a second look before you fulfill an order or honor a redemption if you see:
An email address that looks random or doesn't match the client's name
A client name that looks fake or doesn't match the name on the card
A gift card or package bought online and redeemed the same day or the next day
A card in one person's name used for someone else's appointment, which can lead to a dispute if the cardholder later says they never visited
How to protect your revenue from payment fraud
Use these habits to catch problems early and keep the records you need if a charge is disputed:
Turn on internal notifications for online sales. They flag buyers whose card details or billing address couldn't be verified.
Refund to the original payment method. Mangomint also offers cash or gift card refunds, but only a card refund leaves a record on the card.
Check photo ID against the name on the card before you honor a high-value sale. For sales over $2,000, Mangomint recommends signed paperwork and a copy of the client's ID.
Train your front desk and team on the red flags above, and limit who can issue refunds. In Mangomint, refunds require Admin access or a refund permission.
Turn on only the optional online features that fit your risk tolerance:
When a client disputes a charge, their bank reverses it right away and takes a dispute fee from your payment account. The Mangomint team will contact you through chat support to walk you through your options.
You'll have 10 days to tell us whether you want to accept the dispute or fight it. If we don't hear from you in that time, you automatically lose the dispute and the client keeps the funds.
If you fight it, your evidence needs to show that the cardholder agreed to the charge and received the service. Signed paperwork and client messages help, and bookings made with Express Booking™ also save details about the client's device and the exact cancellation policy they accepted.
The bank's dispute fee isn't refunded, even if you win. Our payment disputes guide covers the full timeline and what to gather.
Trust your instincts and question any transaction that seems off. As a Mangomint customer, you can start a chat with our support team for a second opinion on a red flag. We'll help you decide what to do next.
Want to see how Mangomint's payment alerts and dispute support work for your business? Book a live demo with our team.
Clara Winter is the beauty and wellness writer at Mangomint. She uses her Psychology degree, UX design training, and digital marketing expertise to craft thoughtful, human-centered content that helps salon and spa owners grow their businesses. Fun fact: Clara knows her esthetician’s coffee order by heart and brings it to every appointment.
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