Top scams retailers need to watch for this holiday
Most retailers welcome the boost to their business during the most wonderful time of the year. But the busy holiday shopping season doesn’t just mean more sales and foot traffic – it also means more fraud, as scammers take advantage of the increase in activity to fly under the radar. As you prepare your business for the holiday boom, don’t forget to ensure your security measures are up to fighting some of the most popular scams this season.
As shopping evolves and more platforms become available, fraudsters are devising clever ways to exploit them all. They’ll take advantage of your weakest channel, such as a well-known lax application of your return policy in-store, to pull a scam where they know it will be easiest. Fraudsters are more likely to get away with this when there is a disconnect and communication breakdown between channels. Think of it as the left hand not knowing what the right hand is doing — you may have flagged an email address or credit card on your eCommerce site, but if your bricks-and-mortar store isn’t made aware of it, the scammer can get away with anything in-store. To solve this problem, choose an integrated payment processor built for omnichannel sales, such as Elavon’s Converge platform. Not only will your customers get a seamless experience no matter where they connect with your brand, your business will be aware of and better equipped to handle problems holistically, protecting the entire operation.
In the online world, fraud can take many different forms, such as fake or stolen credit card information and promo code abuse. You can notice these types of fraudulent attempts by monitoring your customers’ shopping behaviour using the tools and analytics available through your content management platform, CRM system and payment processor. At Elavon for example, we offer our clients dashboards filled with easy-to-understand data insights. You’ll have access to a single system that can handle payments, refunds, chargebacks and the shipping paper trail. Use all this info to find out the average order amount, compare shipping and billing addresses, and compare these addresses with IP location. Anything that seems strange or out of place here is probably worth verifying.
After a big sale or even come January, many retailers that accept returns will experience a wave of refunds and exchanges. Common types of return fraud include returning stolen merchandise, returning used merchandise, returning merchandise bought with counterfeit money or cards, and returning old or damaged merchandise using the receipt or packaging of a new item. If your inventory keeps unexpectedly shrinking, your return policy is not being followed or you start noticing a sharp increase in the number of returns, you could be experiencing return fraud. Some simple ways to prevent this include only issuing refunds to the same tender of the original purchase, providing gift receipts, requiring identification for returns so you can track suspicious behaviour, and training employees to consistently enforce your return policy.