According to the National Retail Federation, nearly $61.7 billion was lost by shrinkage in 2019. So facing consumer fraud is no new challenge for most retailers. However, your business could benefit immensely from implementing fraud preventing measures and educating your employees on recent fraud trends.
This article offers tips to retailers on how to detect and prevent consumer fraud at their retail outlets. Keep reading to know more.
1. Understand the Different Types of Retail Fraud
Analyzing recent retail fraud trends for your industry can help you create a fraud prevention strategy. There are various ways in which consumers can commit fraud, including, but not limited to Identity Theft
Also known as payment fraud, identity theft is a common type of e-commerce fraud. Fraudsters use stolen credit card information, email accounts, names, addresses, and other data collected from personal devices to make themselves look like real customers.
Credit or Debit Card Fraud
When fraudsters use another person’s credit or debit card information to make unauthorized purchases under their name, it counts as fraud.
Cheque Fraud
If a customer offers to pay for their purchase with a cheque, take precautions to ensure that the cheque isn’t a counterfeit or a forgery. Watch out for rising retail fraud trends in your industry and urge your employees to watch out for suspicious behavior or transactions.
2. Keep an Eye out for Non-Verbal Cues
Pay close attention to your customer's body language to detect suspicious behavior. Does a customer not meet your eye when talking to you, or do they provide evasive and inconsistent answers when you ask about personal information? These are red flags that could indicate fraudulent behavior at work.
If you’re suspicious of a customer in your retail outlet, you can ask them to provide a state-issued ID as proof of identity. You should also alert your superior and lender of suspicious customer behavior or buying patterns. They will take the necessary steps to scan for and address any fraudulent activities.
3. Maintain Extensive Records
Keep track of every transaction, receipt, and sale history on a protected database, and ensure that it’s updated with the latest information. Maintaining extensive and reliable records of a customer’s purchase history can help you stay ahead of fraudsters.
For marketing purposes, most retailers request personal information from their customers, such as their name, phone number, email, address, etc. You can also use appropriate software to collect and analyze your customers’ product preferences, frequency of purchase, billing and delivery information, and more.
It’s vital that you have an accurate customer profile and transaction history. It can help you detect suspicious buyer behavior and make it harder for fraudsters to attempt identity theft or credit card fraud.
Retails must make a conscious effort to eliminate customer fraud by training their employees on theft and fraud indicating behaviors. Installing surveillance equipment on your premises can also help you detect and trace fraud back to its origins. If you’re a retailer looking for professional lease-purchase services to increase your sales and profitability, contact our experts at Okinus Credit Solutions. We offer multiple lease options with higher approval amounts and lower income requirements.
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