With the rise in online retailing has come a rise in online fraud.
The most common form of fraud most consider is credit card related but in fact, there are many ways that customers are trying to gain advantages through criminal behaviour in the retail space.
When it comes to omnichannel retail environments, where shoppers can mingle between online, and multiple instore locations, particular attention needs to be paid to ensure that any gaps in security are covered.
Surprisingly, in a recent study, 53% of retailers said that fraud is inevitable but more significantly, 33% of fraud victims said they would avoid purchasing with a merchant as a result of being defrauded.*
The costs to retailers is great when fraudulent behaviour is not minimised.
Reducing fraud comes down to good systems and good processes.
With online stores, it is important that your payment gateways that you partner with have built in anti-fraud measures. Some gateways can restrict processing cards that have an origin outside of a designated area as well as live verification using CV2 numbers.
Real time credit card verification is ok but fraudulent use of cards can still occur if the card details are not looked into at a deeper level. When setting up your payment systems it is imperative to ask your gateway provider about the security measures they have in place.
Instore fraud as a result of online purchases can occur if integrated systems are not employed.
Consider this scenario. A customer buys a pair of shoes from an online retailer. They visit a competitors store that sells the same shoes but at a higher price. The customer tries to return the shoes instore to obtain a financial advantage. Without the visibility of the customer’s online transaction, it can be difficult to truly verify the original sale. When staff are under pressure, the likelihood of fraudulent behaviour can be heightened.
To combat this, an integrated retail system that allows staff to verify the online sale prior to providing a refund in store is imperative.
Surprisingly, 19% of retailers believe fraud costs too much to control. The reality is that if the right retail solutions are employed then there is no added cost to the retailer. When considering your retail solutions, don’t forget to pay attention to how you can lose money through poor security systems and processes.