In Canada, March is fraud prevention month. You shouldn't need a calendar-based reason, of course, but that makes this an excellent time to look at what you are doing to prevent fraud in your business. Financial criminals find new ways every day to steal online. Shoring up your business practices can help protect you and your customers.
Post and Follow Transaction Rules
One way fraudsters manage to steal from businesses every day is through the refund process. This might include returning goods or claiming not to have received something ordered. If you don't have a strong policy in place, this can cost you a great deal of money over time.
If you institute a strong return policy that limits the time to claim a refund or the reasons for a return, you can help shut this down before it starts. Place your return policy prominently on your website and in your storefront. It won't stop every instance, but you can limit your losses when you enforce a clear policy.
Require Verification Codes
When you sell online, you never see a physical payment card. A hack of credit card information, from either financial institutions or retailers who store this information, can give criminals access to all kinds of credit card data. That said, these companies are not allowed to store the three- or four-digit verification codes from cards. If you accept card payments, requiring customers to enter those codes can help ensure that the person making the payment does, in fact, hold the card used for payment.
Track Unusual Activity
If you collect data on your customers, you have access to a wealth of information, including billing and shipping addresses and patterns of purchases over time. You should use available tools to analyze these data points. If the amount of a purchase, the number of purchases, the shipment addresses, or other points do not fit usual patterns, you should investigate the reasons for the change.
Taking the time to confirm authorized purchases upfront can feel like a hassle, but it potentially saves you time, money, and frustration later. Any time you can prevent losses before they come, you are doing something right for your business.
Follow the Rules
Card issuers have rules and best practices in place that help prevent fraud. If you take short cuts, you put yourself at greater risk of fraudulent activity. Even more, failure to follow these rules can lead you to lose payment processing privileges with those card issuers. Some customers will push back, but better to risk some petulance than to risk losing the value of the transaction or the customer's patronage over time.
You may not be able to catch every instance of fraud in your organization. Stay vigilant, though; every step you take to prevent fraud can help you protect your customers and your business.