How SA retailers can prevent online and in-store shopping fraud during Black Friday
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By Thokozani Dlamini
Online shopping has become a popular way for consumers and businesses to maximise shopping sprees such as Black Friday.
While online shopping provides opportunities for retail merchants to boost sales and profits, it also requires enhanced measures to minimise the risk of fraud.
Irrespective of whether a business is large or small, it must have measures to detect and prevent fraud for point of sale (card present) and online shopping (card not present) payments. During Black Friday, retailers that have specials are likely to process more transactions than usual. Unfortunately, the risk of in-store and online shopping fraud is also enhanced.
Despite the dynamic nature of online shopping fraud, businesses can be better prepared to prevent it if they pay careful attention to warning signs such as:
Failure to verify the Card Verification Value (CVV):
To minimise the risk of fraud, retailers are encouraged to request a CVV number for online shopping transactions. The CVV number verifies that the person placing the order has their physical or virtual card in their possession. A failure by an online shopper to verify the 3-digit CVV number on their physical or virtual card is a red flag.
Several unsuccessful attempts to transact:
When a fraudster is using a stolen card, it is common for the card to decline several times. This could be due to an incorrect address, expiration date, or mismatched CVV. One or two declines may be common, but multiple declines are suspicious.
Billing and shipping addresses do not match:
Although it is not entirely unusual for online shoppers to have two separate billing and shipping addresses, it is important for retailers to double-check orders that do not have matching billing and shipping addresses.
Multiple quantities of the same item:
Fraudulent orders will often be made with the intention of reselling or ordering different items from the same category. To protect your business, keep track of ordering trends and be aware of high-value purchases. Especially when the items are in high demand.
Ensure that the supervisor PIN is adequately protected:
It’s important to choose a strong supervisor PIN to avoid exposing the business to undue risk. Furthermore, a supervisor's PIN must never be shared or written down, and it needs to be changed regularly.
Conduct a daily tally of Speedpoint devices on hand:
Take note of each Speedpoint device's serial number to ensure that only authorised devices are at the store. Be wary of skimming or the tampering of Speedpoint devices.
Verify the details on card present transactions:
Always verify the card by comparing the last four (4) digits of the card number with the first four (4) digits on the signature pad on the reverse of the card. Take note of embossed card numbers that are unusual or of an uneven type or style, and be vigilant when a cardholder presents multiple cards that result in successive declines.
While seasonal shopping sprees such as Black Friday and the Festive Season are key to profitability, especially for retailers, businesses must be on high alert to avoid incurring losses due to fraud.
It is important to remember that fraudsters are always looking for loopholes, so businesses must be multiple steps ahead with adequate safety measures.
Thokozani Dlamini, FNB Merchant Services CEO
*The views expressed here are not necessarily those of IOL or of title sites
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