Tips for preventing fraud at your register this holiday season.

The holidays are a busy time for retailers, shoppers – and fraudsters. As people buy gifts – and maybe return an ugly sweater or two – your business processes more transactions than usual. Fraudsters often take advantage of the season to use false information to complete purchases, returns and exchanges. To help prevent losses for your customers and business, we’ve put together some best practices for heading off attempts to make fraudulent transactions.

Know your customers – and their spending habits.

Your first line of defense is at the register. You know your business and customers best, which gives you a good baseline for normal purchase behavior. It’s difficult to know if a customer is using a stolen card, but certain behaviors may signal a fraudulent transaction. Encourage employees to be aware and watch for the following at the point of sale:

• Irregular purchasing patterns
  Watch for significantly large orders, multiple purchases of the same item, a series of rapid transactions by a new customer, or a change in behavior for a regular customer.


• Attempts to dodge payment processes
  If the customer’s debit or credit card is declined, employees should ask the customer for a different form of payment. The customer may suggest calling the debit or credit card company to verify. The store employee should call on behalf of the customer instead. Do not complete a sale if the customer isn’t able to provide a valid form of payment.


• Lack of interest in a large purchase
  Encourage staff to engage customers in conversation; this can help them gauge a customer’s interest in the item they’re buying. If they’re purchasing a high-value item, and they aren’t asking questions or don’t seem excited, fraud may be at play.


• Identity inconsistencies
  If the customer’s credit or debit card is unsigned, ask to see the customer’s identification. Even if it is signed, the employee can still ask to verify identification if they feel suspicious of the transaction.

Fine-tune return and exchange policies.

Fraud can also happen through returns and exchanges. A fraudster may attempt to return an item they didn’t buy to get the refund. To help prevent issues, maintain a firm policy for returns and exchanges, and make it readily available for customers. Display your policy at the register and on receipts, order forms, invoices, contracts and in any online ordering processes. The following ideas, if allowed in your area, can help strengthen your returns and exchange policy:

• Cash or check transactions will be refunded with store credit on a gift card.
• Debit card transactions will be refunded to the card the original purchase was made with.
• Refunds for credit card transactions will require a written request, and customers may be contacted directly for additional details. Include each purchase item on a separate document and print copies of all supporting documents.

Fraud can cause headaches for you and your customers, but by being engaged with your customers and return policies, you can help spot and mitigate fraud. While these best practices focus on the point of sale, there are additional considerations for online orders and securing the payment technology you use. Compliance with PCI DSS and the implementation of EMV technology can also help decrease point-of-sale fraud.

Also See:

• BEC scams prey on employees' best intentions.
• Payment fraud just reached a record high. Make sure you have the right controls in place.