10 tips to protect your business from holiday fraud
Fraudsters won’t be nice during the holidays. These tips will help keep your
business safe from theft, cybercrime and occupational fraud.
1. Immediately report
Always report unusual activity like application
pop-ups, error messages, unfamiliar login
screens, etc. to your security team right away.
Do not click on suspicious links. Regularly visit
the FBI’s cybercrime site for useful tips and
instructions for reporting a claim if you believe
you’ve been a victim.
2. Audit fraud prevention practices.
First, ensure that you have a documented
fraud prevention plan that details systems,
procedures, roles and responsibilities. It
should cover both tactics to mitigate fraud, as
well as what to do if fraud occurs. Revisit this
plan and look for improvements to strengthen
fraud prevention measures.
Know your benchmarks.
Fraudsters go where they can succeed. Analyze your historical holiday transaction data so that you are aware of your “normal” holiday numbers for chargebacks and decline rates. Also assess prevented and successful fraud by channel, product, payment and transaction type.
Staff up store locations and call centers.
Increase staffing with properly trained employees who can identify, escalate and mitigate fraud attempts. Make sure your team is rested so they are ready to catch fraudsters in your store, online, on the phone or any channel you use.
Consistency reveals anomalies and weaknesses. If your team follows the same processes with every transaction, then unexpected, non-standard actions stand out. Good training drives home standardized practices, despite holiday chaos.
Fraudsters are innovative. It’s their business to steal from yours. Keep an eye on fraud patterns and trends. For example, your business may be susceptible to package rerouting or account takeover based on outdated customer service or ordering protocols. Use the latest technologies, including machine learning to recognize data associated with fraud patterns, to keep fraudsters at bay.
Maintain tight internal controls.
The holidays are no time to lighten up on internal accounting controls such as segregation of duties, audits and management review of expenses, bank statements and collections. While most employees are honest, some are not — and holiday financial pressures may tempt unethical employees.
Use multiple layers of protection.
Set thresholds and limits for customer and employee purchases, with oversight for above-limit purchase and too-frequent return attempts. Examine commission policies to ensure that employees are not rewarded for selling to friends, family or fraudsters who will return merchandise in the post-holiday period.
Ensure a positive customer experience.
You don’t want to create additional “friction” that will make your customer experience slower or unpleasant. Analyze your historical holiday chargeback ratios and false decline rates so you can avoid overly rigid screening that will turn off good customers.
Ask for help.
Every industry has unique fraud challenges. Seek the advice of trade associations and professional advisors who can help you reduce fraud risk related to your specific business circumstances.
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
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