Protecting Your Art Store from Fraud and Chargebacks

So, you can draw (or paint, or craft, or whatever it is that you do that is creatively brilliant), but can you sell? Yeah, that’s an art, too, and it’s something that most creatives get wrong—or at least it’s something they struggle heavily with.

Running an art store online is an exciting venture that opens up endless possibilities to showcase your creativity to the world. However, it also comes with its own set of challenges, especially when it comes to safeguarding your online store from fraud and chargebacks. 

This might not be a big issue if you sell on platforms like Etsy, but if you build your own store (and you should!), you need to learn how to protect your customers’ payments lest you risk major disruptions to your business.

Don’t freak out, though—all small business owners have to learn this at some point, and we’re betting that if you’re reading this, then you’re ready to take that next step.

Fraud in the Art World

Fraud is, unfortunately, a common problem that affects online stores of all kinds, not just art stores. 

And no, we’re not talking about art fraud in the traditional sense, where someone tries to steal your work or resell rip-off copies of famous pieces. We’re talking about payment fraud, a common issue for any online seller.

The first step to getting hip to payment fraud, though? Knowing the different types of fraud so you can prepare and defend against them. 

For instance, identity theft and payment fraud are two of the most common issues online sellers see with eCommerce stores. Identity theft happens when someone uses stolen personal information to make purchases, while payment fraud involves using unauthorized or fake credit card details.

Chargebacks, on the other hand, occur when a customer disputes a transaction, often claiming they didn't receive the item or weren't satisfied with it. Sometimes, these disputes are genuine, but they can also stem from fraudulent intentions. For example, a fraudster might claim a refund while keeping the artwork.

Why does this matter to you as the artist or business owner? It’s your responsibility to handle these kinds of issues or disputes. If you don’t, you risk having your merchant account shut down. If that happens, you can’t get paid!

Implementing Security Measures

To fight fraud, start with basic security measures. 

Ensuring your website runs on secure connections (SSL) and using strong, unique passwords for your accounts are simple yet effective practices. 

Monitoring transactions for unusual patterns can also help you catch potential fraud early. For instance, if you notice multiple purchases from the same IP address or an unusually high number of orders in a short time, it might be a red flag.

Two-factor authentication (2FA) is another layer of protection you can implement. It requires users to verify their identity through an additional step, like entering a code sent to their phone. 

This makes it harder for unauthorized users to access accounts, but it isn’t a foolproof method to prevent eCommerce payment fraud. Instead, you’ll need to ensure your payment processing account is secure in the first place, which brings us to…

The Role of High-Risk Merchant Accounts

Given the nature of art transactions, some art stores are considered high-risk. That’s why you need a high-risk merchant account, a type of account designed specifically for businesses in industries more prone to fraud and chargebacks (hence the ‘high-risk’ classification).

Even if your business doesn’t seem like it would be high-risk, most eCommerce stores are due to how easy it is for hackers to gain access to personal information or claim a chargeback.

To prevent any issues before they occur, having a high-risk eCommerce merchant account offers greater protection. 

Most of these types of solutions are also often paired with a robust payment gateway for eCommerce and added security features and chargeback prevention tools, providing secure transaction processing and, best of all, peace of mind.

We could spend a whole different guide talking about this, but when selecting a provider, look for one with experience in high-risk industries and a good reputation, as they will understand your business's unique challenges.

Maintaining Customer Trust

Again, why is this so important to you if you get paid? Who cares, right? Your customers do!

Building and maintaining trust with your customers is crucial for your art store's success. Clear and transparent communication goes a long way. Make sure your policies are easy to find and understand, including details about shipping, returns, and refunds.

Responding promptly to customer inquiries or concerns shows that you value their business and are committed to resolving any issues. 

Additionally, reassuring customers about the security of their transactions can foster trust. Displaying security badges or trust seals on your website can further enhance confidence.

A Few Tips for Artists and Small Business Owners

What about the next steps? Here are some actionable steps to help protect your store:

• Regularly update your software and plugins to patch any security vulnerabilities
• Use tools and software to monitor your transactions and flag suspicious activity
• Train your staff to recognize signs of fraud and implement escalation procedures for suspected cases
• Stay informed by reading up on the latest trends and strategies in fraud prevention

Ultimately, we can’t stress how important it is to be proactive. Simply learning what to look for, monitoring your transactions, and understanding your online store’s reporting analytics can make a huge difference. 

It’s not as fun as the creative side of your business, but it is what’s going to help you stay compliant and grow—and that’s fun.

Securing Your Creative Future

Again, it might not sound as fun as actually creating art or watching that cash money roll in, but knowing how to safeguard your store from fraud and chargebacks is key to ensuring its success and growth. 

By understanding the types of fraud, implementing security measures, and utilizing a high-risk merchant account, you can protect your creative business. Trust is the foundation of any successful business, and by maintaining it, you'll build lasting relationships with your customers.

Now, we’re handing the baton off to you. You got this! Stay informed and adapt to new threats, as this will keep your business resilient. Your art deserves a safe platform, so take these steps to secure your creative future.