The holiday season - a time of connecting with friends and family, and taking some time to relax before the new year begins. It’s also a time that shoppers spend more than they do the rest of the year, and merchants see a dramatic increase in sales and profits as a result. With more customers choosing to shop online rather than in-store, there are a few things merchants should keep in mind to ensure a happy holiday for all involved (including less headaches for the merchants themselves).
Fraud prevention is an easy but important step to securing any business, and even more so an online store. It’s important that merchants are mindful of cues of potential fraud, and that they implement strategies to automate the protection of their transactions.
Preparing for the Holiday Season
In this lead up to the holiday season, it is important that merchants start to look at their business and ensure they are prepared for this increase in site visitors, customers, and sales. For eCommerce businesses, merchants should verify that their site can handle the additional traffic during this period. Both online and brick and mortar businesses should also, of course, ensure that they have enough staff in customer-facing, operational, and fulfilment roles.
Merchants should also consider whether they would like to offer discounts or promotions on their website. They should also keep in mind that holiday promotions often attract customers from areas that may not typically shop on the site. This means it is advantageous to accept a variety of payments - such as cards, mobile or cross border payments, and eWallets - and transactions from a broader geolocation than may currently be in place.
A simple examination of these types of “practicalities” beforehand will save merchants and their customers a lot of time and energy during the season.
In-Store Fraud Prevention
Ensuring you have enough staff is a great start to preventing fraud in-store. When enough staff are available, they can take time to review card details, match ID’s, and check signatures. It is also advisable to install a payment terminal which accept cards with EMV. EMV cards have a chip inside, making the card nearly impossible to duplicate.
Online Fraud Prevention
Online fraud prevention is important as more customers are ordering from their computers or mobile devices. With all of the virtues of availing products and services online to a broader audience, there are some challenges that come along with it.
Flagging transactions with a mismatched billing and shipping address is a popular method for identifying fraud, but should be examined in the holiday season without immediate decline. Customers in this period often order gifts and have them sent to the recipient, so this type of order should be expected. This also goes for a greater expectation of international orders than a merchant may typically see.
Having a strong system in place - both with internal processes and a fraud prevention-savvy PSP - will give merchants the peace of mind they need during this season.
For merchants both online and in the brick-and-mortar world, there is a commonality in prevention strategies, and thankfully, many of the “heavy lifting” will be done by the right PSP:
- Have a team ready to provide manual review when necessary
- Select a verified PSP with a strong security compliance - PCI DSS Level 1 - to ensure transactions are processed safely, securely, and with accurate information
A feature-rich and secure PSP will offer their own prevention methods, taking the need for management off of the merchant:
- Set parameters for real-time monitoring of transactions via the PSP
- Have the capability to block or blacklist fraudsters as soon as they are recognized
- Maintain awareness of fraud trends - understanding what is going on globally can help to define prevention methods
- Require customers to login to their personal account in order to place orders
After the holiday season, it is important to check chargebacks. Chargebacks are a method that fraudsters use once they have received the goods, to dispute the charge with their banks in hopes of keeping both merchandise and having their money returned. Fraudulent chargebacks can be avoided simply by partnering with the right PSP - one who will employ high levels of security and checks at both the transaction and verification phases, taking the power back out of the hands of 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.