How to Detect and Combat Modern Retail Fraud

Retail Fraud

By Deinah Storm

Modern retail has grown exponentially and is still growing with the advent of e-commerce. Due to the continuous advancements in technology and social media, shopping online stamped its imprint on consumers worldwide. However, as it changed the retail sector, it also attracted the bad with it.

The increase in sales caused by e-commerce’s rise in popularity exposed modern retail to fraud and abuse. Fraudulent activities are a long-time issue of retail even before its modernization. It’s now being committed in various manners that adapt to the current landscape of e-commerce.

In a survey by Ernst & Young in 2019, 36% of respondents considered fraud the greatest risk to their business. It’s why the entire e-commerce industry is focused on fighting it because of the harm it causes to both sellers and customers. To help defend yourself against it, here are ways to detect and combat fraud in modern retail.

Protect your website

Aside from online selling platforms, the leading destination that consumers will be directed to when online shopping is the brand’s website. Most brands decide to sell their products on their websites or at least begin from there. Thus, making sure that it’s fraudproof is a must.

The basic method of securing your website from fraudsters is to encrypt it. Data coming from browsers of users who visit and use your website can be used for identity theft and stealing money online. Prevent that by using an SSL certificate that protects customer browser data.

A mass security breach is one of modern retail’s biggest enemies. It could ruin your reputation and cause consumers tons of money, leading to a bigger mess and inquiring lawyers about what is a class action lawsuit. Encrypting your website will make it difficult for hackers to snatch any data going to your website from your customers and protects you from the worst-case scenario.

Update your software

Another basic security aspect that helps a lot in fraud prevention is updating your software. Just like using SSL encryption for your website, it prevents fraudulent activities by focusing on the source. With the updated software, you strengthen your website or app’s vulnerabilities.

Software creators release updates to iron out flaws called “bugs.” Bugs are imperfections that come out after software is released. They’re the reasons why updates are rolled out periodically or when users are having problems using them.

Updating your software is the bare minimum you can do to prevent e-commerce fraud. Some devices enable you to schedule when to download updates, which you can take advantage of when you’re on a busy schedule and can’t do it manually.

Realize the importance of PCI compliance

The Payment Card Industry Security Standard Council (PCI) partnered with the payment card industry leaders Visa and Mastercard and created rules to help businesses protect themselves and their customer’s data. Complying with the PCI rules is mandatory for e-commerce merchants working with transactions. It’s another easy way to safeguard e-commerce retailers from fraudulent transactions.

Complying with these rules sets the standards for e-commerce security in terms of keeping financial information safe. Failure to comply may result in up to a $100,000 fine for business owners.

Track fraud attempts

If you’ve been victimized by fraud before, it’s only logical that you keep track of all suspicious transactions. Tracking fraud attempts make it easier to prevent them from happening. Nowadays, there are plenty of automated methods and tools that e-commerce businesses can use to do so.

You can use tools to spot patterns of suspicious transactions and analyze them so you can see things coming from a mile away. There are also e-commerce fraud solutions that can detect fake IDs as well. You can find one and utilize it to spot fraud and stop it before it even happens.

Concluding thoughts

It’s virtually impossible to eliminate fraud, but it can be limited and diminished with the right plan, measures, and tools. It’s all about focusing on key aspects that can expose customers and your business to malicious activities. Fighting fraud takes constant work, but these tactics will help ease the job.

 

About the Author

Deinah StormDeinah Storm used to work in the corporate world as a marketing affiliate. She quit her job to pursue her passion for writing, but to this day, Deinah is committed to educating consumers about the different marketing scams and how to avoid them.

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