Retailers jumping to capitalize on e-commerce trends have embraced omnichannel, which continues to gain favor as a business strategy for brands. However, innovation by brands to appeal to shoppers is also finding favor with an unwanted audience: thieves.
There has been ample progress within omnichannel organizations in recent years, as shoppers can now check product availability online and filter by store location. Not only does this help consumers, it also helps the merchant, which can more accurately access the amount of product needed and increase conversions. Unfortunately, this new flexibility also benefits fraudsters.
Criminals who steal credit cards need to quickly use them before the theft is reported. With easy access to buy online through a mobile site, fraudsters can maximize theft by utilizing a popular aspect of omnichannel that makes this type of theft even easier — setting up a buy online, pick up in-store purchase (BOPIS) to seamlessly access stolen goods.
To prevent easy access of products to fraudsters, merchants should keep the following best practices in mind to mitigate retail theft, both in-store and online:
1. Prioritize communication across all departments
A priority for businesses should be to minimize gray areas within store processes so staff can easily follow and enforce the proper policies. Consistent communication, from in-store employees to call-center representatives, will help businesses run smoothly and mitigate potential threats of theft. Leaders should view communication with an open mind as well; if their policies are consistently challenged and overruled by in-store management, they should be refined to balance both employee and customer satisfaction.
2. Embrace technology, new and old
There’s an abundance of digital solutions that offer insight into who has picked up orders, made returns or exchanges. Many retailers are still slow to invest in them, allowing fraudsters to take advantage of gaps between online purchases and in-store pickup. These gaps are often seen in how merchants collect and use customer contact information, such as emails, IDs and phone numbers. This data only works well to prevent fraud if it’s properly shared between two commerce channels.
Having these technologies track and analyze every aspect of the purchasing journey will only strengthen business performance.
3. Be your business’ bouncer and check for IDs
Requiring identification can be tricky; whether to enforce showing a driver’s license during pickup must be defined by the merchant. The most secure company policy would be to require the cardholder to pick up the product and show a government ID before the product can be claimed.
Although thieves may not be deterred by the threat of identification, consistent enforcement and recording of details during pickup can prevent an increase in theft in the long run. News travels fast when a crime is easy to commit; guard the gates of your businesses and don’t allow illicit activity to enter regularly.
4. Cut thieves off at the source
By deploying a state-of-the-art layered approach to risk mitigation, merchants can protect themselves in real time as transactions are created. The highest risk transactions can be manually sorted out for closer inspection or even systemically cancelled if the risk is too great.
In the absence of sophisticated fraud detection tools, merchants can still take steps to protect themselves if they have the right policies in place.
Accumulating stolen goods and reselling them is a slow process; fraudsters prefer to return products for cash or gift cards to make stealing a more profitable endeavor. Establishing a return process that enforces refunds to the original payment method is a smart solution to prevent thieves from doubling down on accumulating merchandise refunds. As a last resort, offer a store gift card to ensure that not too much revenue is lost in the case of fraud.
5. Tie all fraud prevention methods together
Although established before COVID lockdowns, the pandemic acclimated customers to the ease of BOPIS, curbside pickup, and other purchasing methods that fraudsters can easily take advantage of. Although commerce continues to flex with every twist and turn of our dynamic landscape, it’s unlikely that these preferred shopping methods will ever go away. By keeping the above best practices in mind, merchants can continue their refinement for both customer service and risk mitigation.
Digital River helps brands fight fraud and recover revenue on a global scale through a combination of dedicated fraud experts and our customizable, proprietary fraud prevention engine. Interested in learning more? Connect with us today.