Over the past few years, instances of online credit card fraud have increased dramatically. In fact, credit card fraud cost online merchants a staggering $2.6 billion in 2004 alone. If you are an online merchant, here are seven preventative measures you can take to minimize credit card fraud through your commerce site.

Identify the IP Address

Simply knowing the geographic location of a buyer can help prevent credit card fraud. Geolocation technology allows merchants to identify the IP address of a buyer and subsequently calculate the distance between the IP address where the order is being place and the billing address of the credit card. Such technology offers a wide range of additional features that can be utilized the greater the distance between an IP address and the supplied billing information, which can be an indication of credit card fraud.

"High Risk" Countries
Certain countries are known for their high rate of online credit card fraud and subsequently are dubbed as "high risk" countries. Such countries include Egypt, Lithuania, Russia, Turkey, and Ukraine. Knowing if an order originates from a high risk country can prompt merchants to require more authentication from customers.

P.O. Boxes and Shipping Forward Services
Skilled online fraudsters prefer to stay untraceable but still need to collect the physical merchandise ordered using a stolen credit card. Instead of using their actual location, many fraudsters will use a P.O. box or shipping forward service. Again, while this in and of itself isn't a solid indication of online credit card fraud, it can help merchants detect fraud and require further information from customers to provide authentication.

Compare the Zip Code and Phone Number
Online merchants should require phone numbers on order forms. The zip code provided on the mailing address along with the area code of the phone number should match and check to make sure the phone number is valid.

Compare the Countries of the Billing Bank and the Mailing Address
When it comes to global payments, merchants should also make sure the country of the credit card being used matches the country the billing address is located in.

Call the Credit Card Company
When suspicions arise, it's always a good idea to contact the credit card company directly to verify the validity of the card and confirm the basic details of the card.

Request More Identification
When in doubt, merchants should request more identification from a customer before authorizing a purchase. Ask for verification over the phone or have them fax a photo I.D.