E-commerce firms gang up on fraudsters
With a rise in holiday sales comes a rise in fraud, and so security firms are gearing up to make the online retail environment safe for the season.
Retail theft increases both on- and offline during the holiday season, said Sara Bettencourt, a spokesperson at PayPal, San Jose, CA.
"Charge backs are one of the biggest areas of fraud for online merchants," she said.
When looking for fraud, time of day is important.
"We have found that like shopping increases more at certain times of day, most instances of fraud occur consistently at the same time of day in the afternoon," said Carl Clump, CEO at security services company RetailDecisions, London.
These times of day vary in the United States and in Europe, but they are similar to shopping patterns. By being aware of these hours of busy fraud, retailers can take steps to protect customers.
"Online retailers need to take proactive steps to make sure that their customer's sensitive information is kept safe," said Aaron Bidder, president of ControlScan, Marietta, GA, an Internet security and marketing company. "As traffic on a Web site during the holiday season increases, so does the risk of a security breach exposing customers' information."
To protect customers, many retailers use third-party payment systems like eBay's PayPal, BillMeLater or Google Checkout. PayPal requires users to pass through a series of tests to be eligible for membership. When users first sign up, they are required to give banking information, then PayPal either deposits or charges a minimal fee.
With this transaction, users receive a confirmation code on their bank statement. To finalize the sign-up process, users must have this code and the figure that was either deposited or charged. These transactions are very low, usually just a few cents.
PayPal, along with eBay, trains law enforcement in countries with high instances of unsavory online practices. Many retired CIA agents are on staff.
But sometimes the best ways to prevent fraud are good customer service practices. Ms. Bettencourt suggests providing good contact information for customers. Buyers who can communicate with retailers are less likely to charge back.
Also, retailers should be quick to respond to customers and should provide a resolution center. Additionally, publishing a clear return policy on their site may alleviate any misunderstandings.
And of course, use common sense.
"Merchants should be aware of any unusual buyer requests like rushing a shipment early in the season or purchasing with multiple accounts," Ms. Bettencourt said. "Consumers should be aware of any deals that seem too good to be true. They usually are."