Running a retail business can leave you wide open to various cases of fraud. You can be attacked from all angles, and it's vital you give yourself all the tools to prevent it. For the retail store owner, there are common types you should be aware of; these include employee fraud, refund fraud, discount abuse, vendor theft, cash register tampering and returning after use. Knowing the most common types of fraud means you will find it easier to spot the fraudsters and more able to put measures in place to protect yourself and your business. Here are some tips to help you.
The largest percentage of in-store fraud is made up of falsified returns. These include gift card returns and receipts and people returning stolen merchandise using a false or stolen receipt. To counter this, you will need to closely monitor your returns in order to spot repeat offenders, frequency in the spikes and to pinpoint any abnormal data. Carefully train all your employees in the correct procedure for accepting returns. Monitor that they are checking payment type against the receipt, checking IDs, collecting customer signatures and data as well as conducting inventory counts.
Is Your POS System up to Date?
Point-of-Sale systems are regularly updated, and new technology is making it easier for retailers to prevent fraud. EMV terminals are the latest and can seriously increase transaction security for your store. The best POS systems allow you to track purchases, spot any unusual trends, produce receipts that are digital and validate checks being used for payment. Many of them can also collect data on customers returning goods too often and track employee interactions.
If you're using a system that doesn't offer these features, it may be time to think about upgrading and thereby increasing your security. A good system not only prevents fraud. It will also streamline your sales process, increase efficiency and make bookkeeping much easier.
Train Your Employees
Your employees are your front line defense against fraud, so it's vital they are trained in ways to spot it. By providing them with the correct level of training, you are empowering them to act if they feel something is wrong. It will also act as a deterrent. Without a plan for training and educating your employees, they will feel less restricted when it comes to giving away discounts and tampering with the register. Include regular staff meetings in your procedures so that you can discuss examples of fraud attempts as well as role play different scenarios, so that they are more confident at handling such situations.
Physical Ways to Stop Theft
There are a wide variety of ways you can add physical barriers to prevent theft. Security systems and cameras that are visible have been shown to act as deterrents, not just for thieves but for those who might be considering attempting fraudulent transactions. Also consider hard tags, detachers and detection systems.
E-commerce fraud is on the increase, but there are things you can do to protect your business. The most important place to start is with your website's security measures. Make sure that security codes are collected for all transactions and use CAPTCHA to help you spot the difference between a bot placing an order and a real human customer. There are also fraud prevention programs offered by credit card companies and security software providers such as McAfee Secure and Verisign that help to deter hackers.
It's important that all your transactions are checked carefully, and red flags are raised if something doesn't look quite right. This might include off looking emails, billing and shipping addresses that are different. Google Maps is a great tool if you want to check an address before shipping. Alternatively, you could send the shipment with a tracking number and ask for a signature on delivery.
Any information you store when processing card payment details also need to be stored securely. There are standards which have to be complied with. If the standards are not met, then you are liable to prosecution and will have to pay fines. Complying with the standards is also important for the trust of your customers.
Now you've finished reading you are in a better position to deal with fraud and protect your retail business from theft. It's never going to be a problem that goes away, but as you can now see, there are measures you can take to reduce the chances of it happening. Having all your bases covered will make it easier for you to sleep at night and not be kept awake worrying.