One does not have to be a genius to know that businesses are not being run in the same way as they were 20 years ago. The entire world has seen the transition of businesses from on-ground to online. All of this has happened in less than two decades. The rise of the internet and globalization has played a huge part in this. There are only a few businesses in the current world that do not provide its services through the internet. From the biggest brands in the world to the newest startups every business has its own website. From food to groceries, from clothes to electronics, from cleaning to professional courses all services are provided by various organizations online. There are literally no services or products that you cannot avail from online businesses in today’s world.
As good as it may sound this has also given birth to new problems for businesses. Businesses always had losses due to frauds but they were not that usual. The technology which made it easy for buyers to purchase also made it easy for fraudsters or scamsters to get away from their criminal activities. As the technology became sophisticated frauds have become easy to pull off. This is one of the biggest challenges for online businesses as 27% of all online sales transactions are fraudulent. If your business is online then you should definitely know how to prevent retail fraud. These frauds are done in many ways like using counterfeit credit cards, stolen credit card information, return frauds, and employee fraud.
The rates of cybercrimes are higher than ever. So if you want to prevent your business from online frauds then here are a few tips that will help you.
Conduct security audits whenever possible
It is very important to know if your systems have any weaknesses to combat online frauds. You can solve a problem only when you know where it exists. The vulnerabilities in the system may not be visible but can be present without your knowledge. So every business must have a security audit once in a while. It will help you in finding out where the weak points of the system are. Once you find out the weak spots your cybersecurity can fix those patches. This will make it nearly impossible for the fraudsters to get into your system and steal information.
Educate your employees about retail frauds
It is one of the most important things a company must do when it hires its employees. They must educate their employees about online frauds and scams during their training. Most companies do not do this and later suffer because of it. Oftentimes the cybercriminals try to pose as the legitimate account holders to get information or services they need. Your employees have to be quick on noticing any suspicious behavior.
Use CVV for verifying payments
Anyone with a credit card or debit card will automatically know what a CVV is. It is the three or four-digit number on the back of your credit card or debit card. The CVV stands for card verification value. These are the numbers that are used to verify your debit or credit cards. They are unique to every individual depending upon their names and addresses. These numbers are not stored by companies at any means. So using them to verify payments is a very effective way to avoid online frauds. This is because a CVV is present on the card so in order to make a purchase a person must actually have the card. Not only that but they should also have access to the mobile number for completing the transaction.
Monitor transactions every day
Yes, this might look very simple but it is also very effective. It is important to know who you are paying the amount, how much money you are paying, and in which account the amount is being deposited. You must be aware of your business’s cash flow at all times. Carefully monitor your accounts and transactions to see if there is any inconsistency. Observe which accounts your money is going. Track the IP address and shipping information of your customers. There are several instances where transactions have been made to wrong accounts and people in business not noticing it for months. By the time they notice this it would already be late as the fraudster would have withdrawn the money.
Use strong and different passwords
This is one of the most basic things one can do to prevent online fraud. Not having a password or having weak passwords have been one of the major reasons for frauds like identity theft. If the password is small and simple it will be easy for the cybercriminals to crack. Make sure that you have long passwords that would make it hard to crack. Also do not have single passwords for all of your systems. Use different passwords for each system and make sure they are completely different from each other. Do not use passwords that are just words. Use numbers and special characters to make them strong.
Use Address Verification Service
Address Verification Service or AVS is one of the most effective tools out there that can prevent online fraud. It is one of the most common ways in which companies protect themselves from frauds. AVS verifies if the name of the customer and the address provided them are correct. It does so by looking up the information in the credit or debit card company’s files. You can choose to decline the transactions manually or automatically by enabling some parameters.
Store information about customers
When you are doing an online business you must know who you are providing services to. Many frauds are done by the cybercriminals by posing as your customers. This will come in handy if you are scammed. Of course companies cannot personal information but they are allowed to store basic information. You can store information such as their names, email addresses, and delivery addresses. You can also store their IP addresses along with their orders. This will help you to track the source in case of fraud.
Update your systems regularly
Technology is changing rapidly every single day. A software that you are currently using may become outdated tomorrow. Which means it will be easier for cybercriminals to target your business. So make sure that all of your systems are updated regularly. Invest in the latest security measures to protect your systems. Use multi-layered protection to make sure that your systems have no vulnerabilities.
Backup data regularly
This is a very essential step if you want to safeguard your business’s reputation. You may never know when you are going to lose information to a hacker. Usually, the cybercriminals hack the systems of companies and steal all their confidential data. They use it to demand money in exchange for information. These types of ransomware attacks are increasing day by day. Even after paying the ransom they will not return all of the stolen data. In order to avoid such situations it is better to backup all the critical information in advance.
Check the background of your employees before hiring them
Yes, many people fail to understand that a large number of financial frauds are an inside job. You may hire people with excellent academic qualifications but all of it is not of any use if they are not loyal to your company. Always make sure that you are hiring an honest person. Conduct background checks to see if they have a good track record. When it comes to financial matters make sure the power does not lie in the hands of a single employee. Appoint two to three people to look after them. In this way you would be safe from employee frauds.
Businesses have taken an entirely new form. They have shifted from the real world to the virtual world. Every product and service is just one click away. The online business trend has given rise to new kinds of fraud. Businesses lose billions of dollars every year because of online fraud. All of them can be prevented by taking some simple measures. Use CVV and AVS to verify the customer’s information. Always monitor your bank accounts and transactions. Train your employees to detect any suspicious behavior. Store the information of your customers and dealers. Update your systems and conduct security audits regularly. Do background checks on your employees before hiring them. Always backup your critical data so that you don’t lose data even after a cyber attack. Follow these tips to prevent your online business from fraud.