DUBLIN--(BUSINESS WIRE)--Global Risk Technologies, a leading technology firm specialising in risk mitigation, fraud management and chargeback solutions, is warning individuals and online retailers to be aware of hidden threats this Black Friday (27th November), which experts predict could create the first £1 billion UK shopping day.
83% of the UK public are reportedly aware of Black Friday discounts. 2014 saw a 4.5% drop in department store sales, while online sales across Europe are expected to grow by over 18% through 2015. Booming sales may be great on the surface for merchants, but masks increasing online fraud and chargebacks.
Chargebacks typically act as consumer protection to individuals who have been victims of identity theft, merchant errors or unethical business practices. However, increasing numbers of chargebacks are fraudulent, with some consumers obtaining products without paying for them - a process known as friendly fraud. Black Friday sales disrupt normal shopping behaviours, making finding and stopping friendly fraud like finding a needle in a haystack.
"Online merchants should pay close attention to transaction disputes as part of risk management strategies, because high chargeback rates are frequently a sign of retail fraud," warned Monica Eaton-Cardone, CIO and co-founder of Global Risk Technologies.
"Beyond losing merchandise and profits, Internet retailers can face additional fees and consequences in relation to chargebacks, particularly if they exceed the 2% threshold set by acquiring banks. Our ongoing goal is to pinpoint locations with higher-than-average chargeback rates to allow merchants to perform due diligence on orders."
To help online merchants eliminate Black Friday fraud and chargebacks, Monica Eaton-Cardone has provided some tips for incoming orders:
- Require a Card Security Code: Be sure to obtain a valid card verification code (CVC). This helps prevent cybercriminals from placing fraudulent orders with stolen card data and can serve as valuable evidence in a chargeback dispute.
- Collect and Compare IP Addresses to Physical Addresses: This helps identify the physical location associated with an IP address and confirm if it matches the billing and/or shipping address. This information can flag suspicious orders and help prove the legitimacy of a disputed transaction.
- Use Automated and Manual Analysis: Manually approving all transactions can be costly and time consuming, while automated systems may decline legitimate orders or miss potential fraud. For optimal results, choose a risk management solution/partner that combines both advanced technology and human expertise.
Black Friday chargebacks typically hit retailers from January. Retailers can minimise risks by implementing the correct fraud prevention methods before chargebacks hit. The key is to understand the reasons why chargebacks occur and having the best practices, processes and technology in place to combat instances of fraud.