The holidays are a time for friends, family, and, for many business owners, a spike in sales. However, it’s also high-season for some scam schemes, especially when you’re selling hot-ticket items (cell phones, tablets, hoverboards, rocket skates, electric scooters). So to protect yourself from scams and buyer fraud this time of year, here are some key preventive measures:
1) Avoid one-size-fits-all approaches — Many online merchants make a general temporary adjustment to loosen fraud-prevention rules, supplementing with additional manual reviews to accommodate the increased holiday volume.
2) Make your customer data work for you across the business — While many risk teams already use internal customer data to improve fraud detection, the explosion of channels and devices means there are other data sets across the enterprise that can be leveraged effectively to maintain visibility and authenticate identities across the digital ecosystem. Further, by establishing and maintaining a single, persistent customer view, companies benefit from additional, actionable insights throughout the customer journey.
3) Bring fraud and marketing efforts together — Although this is not an obvious combination at first glance, this relationship can be one of the most powerful in the enterprise. More channels, more campaigns and increased volume mean new challenges for fraud-risk managers. Together, fraud and marketing teams can help the top line and the bottom line by preventing bad transactions without impacting the customer experience. The past often can tell a lot about the future. These groups should jointly review past holiday performance in terms of both top-line growth and successful risk strategies that complement those growth objectives and use the insight to form future strategies.
4) Establish a dedicated team responsible for the customer experience — Several of our financial services clients are reporting notable success with digital groups. These teams are responsible for bringing together marketing, risk and consumer experience experts to create and maintain a directional and strategic customer purview across channels. Formalizing the sharing of data, processes and best practices among these traditionally siloed departments is a way to process more customers while reviewing fewer transactions, catching more fraud and providing a hassle-free customer experience.
5) Stay ahead of evolving market conditions — There are some things that are out of retailers’ control, such as the impending October 2015 EMV rollout in the United States. While most point-of-sale transactions will be vastly safer and more secure as a result of the rollout, we have seen card-not-present fraud rise in Europe, where EMV already is in place. This is because criminals will focus their energies on the fraud they can still perpetrate. We also have the proliferation of personalized mobile transactions. While this technology aids in ensuring a seamless customer experience, personal and/or financial information now is being exchanged at an increasing rate and exposing businesses to new fraud risks. Being aware and having a plan to react quickly to the ever-changing fraud landscape can significantly increase the chances of thwarting criminals and keeping businesses safe.