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One of our customers that normally buys no more than $50,000 a month and averages less than $30,000 suddenly placed an order for $200,000. I am concerned that this may be some kind of fraud. Any comments?

Answer: I think your concern is justified. I would take as many of the following steps as practical to confirm this is a legitimate order. Confirm with the salesperson that she has been working on the large order for some time. Find out where your merchandise is going. Insist on receiving a hard copy purchase order from the customer. Check the ship to address; ideally, the bill-to and ship-to addresses will be the same. If you are drop shipping the product, make inquiries to try to find out of the goods are being delivered to a legitimate, active business or to an unknown, mystery company. One suggestion would be to schedule a personal visit to the customer to evaluate the risk of extending credit first hand.

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