Fraud Prevention Best Practices in the Holiday Shopping Season

online shopping

The holiday season is nearly here, a fact made abundantly clear by the crowds in the shopping malls, and announcements of special sales and promotions from online retailers. The holidays, of course, present opportunities for connection with family and friends, and time off to (theoretically) relax and settle in to the new year. But this is also a time of increased shopping and dining amongst consumers, and with this comes a boost to merchants sales and profits. 

Many consumers opt to avoid the crowds and lineups at the checkout counters in favor of shopping online rather than in-store. With this in mind, there are a few best practices for merchants to employ to ensure the holidays stay happy.

Preventing fraud is amongst the easiest and most important steps for any merchant, perhaps even more so in the world of eCommerce payments, where businesses don’t have the benefit of being able to handle cards and look at their customers in the eye. By understanding the cues to signal potentially fraudulent transactions, merchants can take preventative measures, and implement automation strategies to protect their transactions – and their bottom line.

Read on for some key eCommerce fraud prevention best practices:

Preparing for the Holiday Season

Preparation is key, as starting the season off with measures in place gives merchants the gift of peace of mind as they accept and fulfill orders. To start, begin by examining your capabilities to handle an increase in traffic during the holiday period. Will your site – and your staff – be able to support an influx of visitors and transactions? This applies, of course, to both online and brick-and-mortar businesses. Be sure you have enough staff to cover all facets of the business, from customer-facing roles, to operational and fulfillment positions.

Then comes the question of promotions and discounts. Many merchants take advantage of the holiday hype by creating special deals to attract more customers, especially many first-time buyers. When bringing in new customers, it is important to make their shopping experience as smooth as possible. A great way to accomplish this is to accept a wide variety of payment methods, allowing the shopper the freedom to choose the method – cards, mobile or cross border payments, or eWallets – that best suits them. This also means an increase in business for eCommerce businesses looking to reach people in a broader geolocation.

Essentially, the advice is this:

  • Ensure your site is prepared to handle an influx of traffic, and that you have the staff required to support the business and customers as required.
  • Decide whether you’d like to offer discounts or promotions during the holiday period, and set out your terms clearly.
  • Accept online payments, and a variety of methods to ensure that customers can use the one that suits them when making a purchase, and that they don’t take their favorite credit card elsewhere.

By ticking the boxes on these preparation “practicalities” in advance of the holiday rush, merchants will save themselves a lot of time and energy.

In-Store Fraud Prevention

Having enough staff in-store is an obvious step for customer satisfaction, as you’ll have enough people facilitating customer needs and keeping the lines moving smoothly. But making sure you have enough people on the schedule is another fraud prevention best practice.

With enough staff available to assist customers and process transactions without rushing through, they can be sure to take the time to check all of the important details before handing over the merchandise to the customer. Reviewing card details, matching forms of identification, checking signatures – make sure your staff are trained in these steps, and that they follow them with each customer.

Installing a payment terminal which accepts cards with EMV – cards with a chip contained inside which makes them nearly impossible to duplicate – is also an easy way to add another layer of security.

Online Fraud Prevention

Adopting an eCommerce model is a great step for many businesses, as merchants can make their products and services available to a wider audience. While it’s a great opportunity for businesses to grow and customers to get what they’re looking for, online fraud prevention is essential.

Many customers – those shopping from other locales, as well as those right up the street – prefer to shop online or from their mobile devices these days, and this trend shows no sign of slowing. Make sure you’re savvy in methods of fraud prevention when moving your business online.

A popular practice is to flag transactions with a mismatched billing and shipping address. In the holiday season, this should be carefully examined. Imagine your customer places an order and wants to ship your product to their office rather than their home so that the gift remains a surprise to their family member. While it’s an excellent practice to flag these transactions, they shouldn’t be immediately declined as your customer may miss out on their precious gift. Instead, implement a system to check the orders and the card information to confirm that the purchaser is who they say they are. Your customers will be happy you checked.

Have a good workflow and strong system in place for internal processes and in conjunction with a security-savvy PSP, and you can rest easy that you’re sending gifts to the right places this season.

Prevention Methods

Whether you’re running a storefront, online shop, or both, you will have similar security and fraud prevention strategies. The good news is, getting the right PSP for in store or online payment processing means you don’t have to tackle it alone. With the right PSP on your side, you’ll be supported by:

  • A team ready to process manual reviews when needed
  • Adoption of a strong security compliance – PCI DSS Level 1. A verified PSP will adhere to this standard to be sure your transactions are safe, secure, and accurate when processed.

A feature-rich and secure PSP will offer their own prevention methods, taking the need for management off of the merchant:

  • A suite of prevention methods brought to you by the PSP, alleviating the need for in-house management of elements such as:

Real-time monitoring of transactions

Blocking or blacklisting of fraudulent customers as soon as they are identified

Tracking and navigating fraud trends, with a deeper understanding of global activities to define prevention methodologies

Requiring personal account logins in order to complete a purchase

Post-Holiday Season

You made it through the holiday season, and now it’s time to check in, reconcile accounts, and get set for a fruitful new year. It’s paramount to check chargebacks, and to block fraudsters from unjustly keeping both the goods, and the money.

Fraudsters leverage chargebacks by disputing the charge with their issuing bank, with the goal of having the money refunded while they keep the products. Partnering with the right PSP – one with an eye on a high level of security and thorough checks both at the transaction and verification phases – will close the door to fraudsters.

While it may seem overwhelming, it is actually quite easy to reduce or eliminate fraud with the right systems in place. PSP’s such as DPO take a lot of this work out of merchant hands by implementing their own digital systems and fraud management teams to protect merchants and their revenues.

It’s natural to feel a bit overwhelmed with security measures. Internal fraud prevention best practices are crucial, and you want to get it right. While it may seem like a big job, if you have the right systems in place, the job becomes pretty simple.

As a PSP, DPO does a lot of the fraud prevention work for you, through dedicated fraud management teams and digital systems keeping an eye on trends and risks in order to keep your business safe. The fraud prevention team at DPO works 24/7 to monitor transactions, increase efficiency on behalf of merchants, and facilitate secure payments, providing round-the-clock support to merchants and their customers.

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