This Spotlight on Customer Service blog series is brought to you by
First Data, a global leader in electronic commerce and payment processing. This six-part series will focus on strategies to increase customer satisfaction with online and mobile shopping experiences.
Some of the risks that credit fraud pose to small businesses are obvious: Money lost from reimbursed goods and non-refundable processing fees are two examples that can undoubtedly hurt a company’s bottom line. There are more subtle costs too, however. Fraud can indirectly hurt sales by decreasing customer satisfaction and by damaging a company’s brand.
Your business could be subjected to fraud through breaches in your computer systems, from physical acts of theft at points-of-sale or from your employees themselves. It is important that businesses have a plan that that decreases their vulnerability to all types of fraud.
Here are five steps that small-business owners should take when creating this plan:
Identify vulnerabilities in your data-management system. The first step toward knowing how to protect your customers’ information is knowing exactly how that information travels through your company’s databases. According to the Better Business Bureau, small-business owners should complete a comprehensive checklist that includes the type of information you’re are collecting from customers, the places where this information is stored, the people who handle the information and the devices used to input that information.
Keep your databases up-to-date. This means keeping your virus protection software updated and paring down the existing databases on a regular basis. If you have customer information that you don’t need anymore, get rid of it — it only creates more liability.
Monitor areas in your business where goods are exchanged. Many instances of credit fraud originate from employees who have either hatched a plan or have been swayed by an outside contact. It might be a good idea to put a security camera near cash registers as a precaution. Also, a quick, easy way to implement an internal policing safeguard is by creating an ethics hotline, or what some call a whistle-blowing hotline. According to former FBI agent Ken Springer, most employees are more loyal than you think and will speak up if they see suspicious activity.
Know your state’s credit transaction laws. Many states have laws that require businesses to follow certain procedures when handling online payments. Being compliant with these laws will not only help keep your customers’ information more secure, it also will minimize your company’s liability if your security is breached. A good place to start reviewing these guidelines is at the PCI Security Standards Council.
Make fraud protection an ongoing operation. Unfortunately, there’s no single solution to avoiding credit fraud. Fraudsters’ methods evolve almost as quickly as the safeguards put in place to stop them. Because of this, preventing fraud is an ongoing operation more than it is a single policy change or software implementation.
How does your company prevent credit fraud? Has the increase in e-commerce and mobile commerce changed the way you handle fraud prevention?