Data breaches! They are everywhere! From Target to Equifax, identity thieves are constantly trying to steal coveted consumer data, putting businesses on the defense. The attacks are coming from all sides, from physical card skimmers to data hacking attempts.
Wait! There is more! Not only to businesses have to deal with the fraudulent activity from traditional thieves and hackers, they must also deal with a type of friendly fraud stemming from both charge backs refund abuse. Refund abuse is a broad term for various types of fraud, including when a person buys something with the intention to return it or “renting” an item. According to Loss Prevention Media, over 9 billion dollars of annual returns are fraudulent in the United States. This 9 billion dollar figure is just in direct financial losses and doesn’t even include “peripheral” losses that businesses must deal with after a return.
With all of the attempts at fraud that businesses are faced with it can often feel like you are just trying to keep your head above water. BeeKash wants to help you keep your business safe and profitable, below are some strategies to keep customer data safe and to help combat fraud.
Educate and Train Employees on Fraud Prevention
Your first line of defense in combating fraud is making sure your employees understand the different types of fraud that are out there and how to spot them. If you have card present transactions, train employees to look for card skimmers/tampered POS systems or a new and suspicious Wi-Fi network. For card not present transactions, you can provide a list of red flags that would indicate suspicious activity, which can then be stopped immediately. By arming your employees with knowledge on fraud you can help proactively try to prevent it.
Make Use of All Security Options Available to You
There are numerous security options that exist to help ensure that the person using credit card is the rightful owner, but often times businesses will skimp on using these security options because it is inconvenient for everyone involved. Though it may take your employees more time to checkout customers or take consumers more time in the checkout process online, utilizing all security options is always the best practice. Taking the extra effort to verify the IP address, ask for the credit card security code, using an address verification service, or two-factor authentication can end up saving you time and money in the end.
Additionally, you should always make sure to update and patch your company’s software and constantly evaluate internal security protocols to make sure they are up to date and being followed.
Be PCI Compliant and Work with a PCI Compliant Processor
If your business accepts credit cards, it is already a requirement to be PCI compliant (find out more about PCI compliance here). Being PCI compliant ensures that you are instituting the gold standard of consumer data security protocols. Furthermore, becoming PCI compliant and proudly displaying the PCI compliance logo on your website acts as a deterrent for those looking to commit fraud. It acts similarly to a well-lit house at night with a security company sign out front, a robber would most certainly choose a darkened unsecured house over the well-lit protected house.
Addressing and Preventing Return Abuse and Fraud
Returns cost businesses billions of dollars annually and that number doesn’t appear to be going down any time soon. A great tool available to businesses is utilizing a POS refund system (either made by a third party or custom built) will allow your business to efficiently and effectively process returns and verify the legitimacy of a receipt. Selecting a POS refund system that can scan driver’s licenses for returns can also help to collect data on refund abusers who return items at an abnormally high rate.
Of course no system can be 100% fraud proof but being vigilant and taking steps to make fraud more difficult is a step in the right direction.