Holiday Shopping – ‘Tis the Season for Retail Fraud

Brian Graham – Senior Vice President, Enterprise Sales for North America

With the holiday season right around the corner, retailers are gearing up for the two most lucrative months of the year. According to the National Retail Federation (NRF), retail sales are expected to increase a solid 3.6 percent to reach $655.9 billion in November and December. Yet, despite the good cheer these sales numbers will bring, not everything is merry and bright for the retail sector – ‘tis the season for retail fraud.

Fraud Facts 

The Association of Certified Fraud Examiners (ACFE) reports that fraud losses are generally 20 percent higher during the holiday season, when compared to the rest of the year. And, last year’s numbers were particularly alarming. From 2014 to 2015, fraud attempts grew by 8 percent during the holidays. At the same time, omni-channel shopping – including over-the-phone, e-commerce and mobile payments– rose by 21 percent. This suggests a strong correlation between the growth in Card Not Present (CNP) transactions and fraud rates.

This year, online sales are predicted to increase by as much as 10 percent, meaning CNP fraud, too, will likely see an upsurge. But, those numbers may grow even steeper in the U.S., as more brick-and-mortar stores (including the popular BJ’s Wholesale Club, Nordstrom, Home Depot and Barnes & Noble) announce that they will close on Thanksgiving Day, which is traditionally one of the busiest shopping days of the year. As a result, consumers may turn to alternative channels that require CNP payments to catch the latest and greatest deals.

Already in 2016, the retail industry has accounted for 102 breaches and 16.3 million compromised data records, so the pressure is on to secure sensitive customer information and deter fraud of all types. To combat CNP fraud, start with the call center – often deemed the most vulnerable channel. Call center risk is especially high during the holidays, as major retailers’ bring on thousands of temporary, seasonal and outsourced employees. For instance, Macy’s plans to hire 83,000 seasonal workers for not only its stores and distribution/fulfillment centers, but also its call centers, this November. Whether due to a lax screening process, a lack of training or the new hire’s disregard for company policy because of the short tenure, temporary agents carry inherent risk.

How can your call center prepare to fight retail fraud this holiday season?

In addition to properly screening and training temporary employees, consider our favorite notion: “they can’t hack what you don’t hold.” Protect your customers’ payment card data, as well as personally identifiable information (PII), by shielding it from your agents and keeping it out of your infrastructure altogether. Our solution does the trick, allowing customers to enter their payment information via their phone’s touchtone keypad, while masking keypad tones and directly routing data to the bank.

If Semafone is not on your wish list, there’s still time to add it. We’ll help you give the gift of peace of mind to your call center – and your customers – this holiday season.

###

Holiday Shopping – ‘Tis the Season for Retail Fraud
Semafone