The holiday season is a fun time of year. It’s also a stressful time for business owners. The long hours, the extra traffic, and the need to increase sales can all add up to greater opportunities for fraud. Fraud in business comes in many forms including payment card fraud, identity theft, counterfeit returns, and more.
This article will help you to reduce your risk during this busy time of year by highlighting some common issues that you should be aware of when it comes to holiday season fraud.
Accept new users, not all of them are fraudsters
Your business can’t afford to lose out on new customers, so it’s important you have a fraud detection solution in place to separate legit users from scammers.
Fraud is so pervasive that it’s a constant threat for businesses, particularly during the holiday season. It can be hard to spot as well as prevent online transactions from being fraudulent. Data from the National Retail Federation shows that up to 15% of sales during the holidays could be done by fraudsters.
If possible, implement measures like using a layered approach to identify suspicious activity and training staff on how to identify and report instances of fraud.
Not only will it prevent chargebacks and false claims, but it will also help you retain your current customer base.
Use same-day delivery options like BOPIS
Some of the most high-risk times for fraud occur during holidays and special events. Fraudsters use these occasions to take advantage of the busy season and make fraudulent transactions.
To reduce online fraud, businesses can offer same-day delivery and pickup options that meet their customers’ need for speed and convenience. By offering faster shipping, you can reduce the number of in-transit orders, which will help you detect fraudulent transactions before they happen.
And with same-day delivery options, you can also reduce the number of orders that need to be shipped only after payment is verified.
A large number of companies are preparing for the onslaught of returns expected after Christmas, but experts warn that many retailers will be faced with a new type of fraud they have not yet experienced.
Though a lot of shoppers are expected to return gifts purchased online in the post-Christmas period, some criminals may exploit the system to defraud businesses. This year, many people purchased goods with their credit cards and returned them in person at retail stores without any difficulty. Therefore, criminals might try to exploit this trend by purchasing goods and returning them for their personal gains.
Account takeover is the practice of maliciously taking over someone else’s online account, often using their personal information to gain access. While it can happen on Facebook, Instagram, and other social media platforms, the risk is especially high on retail websites during the holiday season.
Businesses can protect themselves against account takeover by implementing advanced fraud detection tools on their ecommerce sites. This way, they can identify fraudulent transactions before they approve them and prevent accounts from being compromised in the first place.
Author Bio: Content crafter Alex Wilmont has been active in the payments industry for over 15 years. He lives simply, gives generously, and loves his 2 dogs. His mission is to enhance and innovate the fintech industry for years through groundbreaking solutions like Pinwheel Pay.