Fifth, be careful what you say. For most employers, simply giving dates of employment, job title and ending pay will be enough to satisfy the request. Many employers also indicate whether or not the employee is eligible for rehire. You should never give out any potentially harmful information, such as the reason for a termination. Instead, simply repeat that the subject is not eligible for rehire.
Finally, stick to your policy. It is always tempting to go beyond your policy and say something positive about a good employee, or say something negative about a truly terrible one. This is how employers get sued. And you can't assume that the former employee won't find out because there are now scores of reference-checking companies on the Internet, offering to help job applicants find out what their old bosses are saying about them. Bending the rules will eventually catch up to you.