Running a retail store involves more than just managing a smooth-running operation; it also includes protection against any attacks. Without a doubt, shopping scams are a significant threat to any type of company. In the first half of 2020, there was a loss of £29.7 million due to online shopping and auction fraud. By identifying the common retail scam at brick-and-mortar stores, business owners can be better prepared for these attacks and have appropriate prevention measures.
Common retail scam you may face
Gift card fraud
Nowadays, even small retail shops can produce and sell branded gift cards, thanks to improved technology and pricing. Every technical advancement, of course, brings with it new problems, and gift card fraud is one of them.
Gift cards seem like easy payment options, however, they have poorer security compared to other payment methods. The scammers often ask consumers to load money into a gift card and pay for something (often referred to as ‘urgent’). From that scammers can get the information and PIN number of that customer and steal their money.
For retailers, it can also happen that the hackers access your gift cards’ customer information and take dangerous actions.
Manipulating inventory happens when there is an intention of faking the supply or demand of products and driving the price up or down.
Many employees are in different departments at the same time, although they might not even understand how their store’s inventory system functions. Apart from that, in mom-and-pop stores, the employee in charge of checking out customers is always the same person who is in order of pricing products, opening new shipments, and inventorying stock in the first place. This opens the door to merchandise fraud and inventory manipulation.
Although many shoplifting cases are from external environments, there are also scams that include both an outside thief and an employee. An employee can strike a deal with a friend to share a portion of a take.
In this case, the employee will agree to look the other way as the accomplice dresses and behaves like a traditional shoplifter. Retail workers often use this technique in small shops with just one or two people on staff. This happens when security cameras are present. To appear uninvolved, the employee could also pretend to chase the “suspect” away from the scene.
False cash return
Fake cash return scams are the oldest trick in the retail thief’s book because they’re the most simple to set up. The scammer pretends to return a product and get their money back. The important thing is that this item is often a stolen product or used one. This is one of the most successful ways to defraud a store because it avoids a few common fraud-detection traps. Companies with poor return policies or security may face this type of retail scam.
Credit card fraud
Credit card fraud is one of the most common types of identity theft. Without a doubt, it is something store owners should be aware of because it can seriously (and permanently) damage your company’s image in the community.
This type of fraud can happen without a physical credit card in the hand of the scammers. They will get basic details of customers from holes in security and commit fraudulent activity via email, mobile phones, or other online websites. Many times, your store might have customers’ credit card information. Therefore, it is highly important to ensure high security and prevent any scammers from stealing your clients’ sensitive accounts like credit cards.
How can retail stores prevent retail scam?
Integrate secured devices and software
One of the most powerful ways to combat all forms of fraud is to integrate a secure managing system in the first place. A fraud detection solution can be a third-party service that identifies red flag transactions. It protects eCommerce merchants from fraud such as card checking, friendly fraud, and chargeback fraud.
A fraud detection solution is beneficial to businesses of all sizes. Although you should conduct due diligence to find the right vendor, a high-quality fraud detection solution can always be an effective solution.
Train your staff
To prevent sweethearting, store owners should make transparent rules for their workers. Although giving discounts to friends may not be considered ‘cheating’ by many retail employees, many others have the policy to discourage them from doing so in the first place.
A smart solution to sweethearting scams is having well-monitored inventory control. If an employee can give away goods for months without you knowing, it’s a failure of your inventory system. To have better control over your inventory, you can consider having a powerful point-of-sale system that supports this.
Use video surveillance to monitor actions
You can prevent theft by increasing surveillance. While even an exceptionally bold employee can attempt a cooperative shoplifting scheme, they will have difficulty repeating it if cameras are present. Moreover, security cameras can also work for external theft, who are becoming more aware of the power of surveillance. A single suspicious action can be easily spotted as retail stores are now having cameras from multiple angles to monitor their items.
Having a strong security system is essential for any business to operate smoothly and gain more trust from consumers. We hope that this article has provided you with some useful tips to prevent retail scam and develop a stronger ‘shield’ against theft.
As stated before, a point-of-sale system can be beneficial to strengthen your security practices. ConnectPOS is one of the leading POS that has secure payment options and advanced inventory management. Contact us for more information about how it can help prevent retail scams.