Small Businesses: Most Common Economic Crimes To Watch Out For


When a small business falls victim to an economic crime, the impact of it can be catastrophic, as opposed to a big business where there are ample reserves of money cover the loss so they can move on. Small businesses are more at risk of becoming a victim of a common economic crime than larger businesses simply due to the fact that a small business has fewer resources to allocate towards preventing those crimes.

In addition, if you own a small business, you should keep yourself informed about the new ways that criminals are taking advantage of companies such as taking a course in economic crime.


Some of the more prevalent economic crimes that can affect small businesses include:

  • Writing bad checks
  • Using fraudulent credit cards
  • Passing counterfeit bills

In many cases, business insurance will not cover losses sustained for these reasons, or even if they would, your deductible may be too high in the first place to recoup anything.

Staying Away From Bad Checks

There is nothing that will overtly tip off someone at a register that the customer is writing out a bad check. For the most part, you do have legal recourse against people who write bad checks, but unless they live nearby, and the amount is substantial, it is oftentimes just easier to write it off as a loss. Protecting yourself from this starts with limiting who can write a check, specifically giving the option only to those who live either within the state, or within a certain radius of your business. This way, you don’t have to worry about someone travelling through, bouncing checks at several businesses, and leaving the state. With a local person whose check bounces, the person is close enough that you can start legal proceedings against them.

Looking Out For Credit Card Fraud

It seems as though it is rare for a cashier to look at the back of your credit card when you use it to verify the signature, or ask for your ID, even though it would stop people from using stolen credit cards almost entirely. Taking a stolen credit card as payment can sometimes mean that you end up on the hook for the amount spent at your store. The easiest way to prevent this is to look for a signature on the back and check the cardholder’s ID if you don’t know who they are.

Another thing to look out for when dealing with credit cards is when you ship something, always get some sort of delivery confirmation or tracking number. It is far too easy for someone paying with a card to dispute the charge with their credit card company saying that they never received the item that you definitely shipped out. Without proof in the form of a tracking number, there might ultimately be little you can do to prevent the credit card company from taking the money back out of your merchant account.

Protecting Yourself From Counterfeit Bills

Counterfeit cash is a big problem for small businesses since there is a good chance you might not have any other information on who gave you the bill other than what they look like, if you can even pinpoint it to a specific person. In almost every case, the bill is caught at the bank, you will probably be questioned about it, and end up losing that money. Protecting yourself from a counterfeiter starts with using a counterfeit pen, which turns a certain color on fake currency. Training everyone in your business to use it on $20, $50, and $100 bills will help catch a counterfeiter in the act.

Even though your business is small, you should still be doing everything that you can in order to prevent yourself from falling victim to an economic crime. Taking even little precautions will help thwart the majority of potential crimes, and you won’t have to worry about taking a hit to your bottom line from any fallout that might come about from those crimes.


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