How to Protect Your Online Business From Fraud

Unfortunately, many businesses will fall victim to fraud at some point during their lifecycle, which might not only cost them a considerable amount of money but their reputation, too. For instance, your company could become the victim of hacking, phishing, or a fraudulent transaction.

Fortunately, there are many steps you can take to reduce your risk and shield your brand. Find out how to protect your online business from fraud.

Choose a Reputable Payment Processing System

A reputable credit card processing program can effectively protect your business from fraud, as it can help you to avoid unwarranted chargebacks that would otherwise drain your profitability. Continually safeguard your finances by only choosing a provider that offers an innovative fraud and chargeback reduction tool, which features email alerts and detailed reporting.

Strengthen Your Passwords

Sadly, there are many talented hackers who possess sophisticated programs that can run through various password permutations. As a result, it can be simple for them to crack a simple password and gain access to your website and data, which is why you must increase your password security.

To effectively protect your site and information, you must set an eight-character, alphanumeric password, which should also feature at least one special character and a capitalization.

Perform Background Checks on All Employees

Hiring the wrong member of staff could lead to fraudulent activity across the business. For this reason, you must perform background checks on all new team members, especially if they will have financial responsibilities.

Doing so will help to keep your company safe from criminal activity, which can preserve your company’s finances and reputation. You also should inform all employees that you regularly review your finances for fraud, which can deter unscrupulous staff from fraudulent activity.

Update Your Software and Platforms

Many people are guilty of ignoring essential software and platform updates, as they believe they are too busy to wait for a program to update to the latest version. However, you could soon realize your mistake if you fall victim to a hacking, as it can lead to vulnerabilities in your tools. Keep your online business safe by regularly updating your software and programs with the latest security patches, which can prevent fraud, malware, and viruses.

Monitor Your Returns

There will more than likely be times when a customer will need to return a product to your business, as they might not like the item or no longer need it. Ensure your online company doesn’t fall victim to a fraudulent scam by continually monitoring your returns.

For example, a customer might buy a fake copy of an item, which is available for a fraction of your RRP, which they’ll then send to your business. As a result, you’ll receive the cheap substitute, and they’ll walk away with a high-quality product and money in the bank. So, carefully review every item returned to your business to ensure you never fall victim to fraud.

Check Every Product You Send

In addition to monitoring your returns, you also should check every product you send to ensure they don’t have any defects. If possible, take photographs of an order and the customer packaging, so you will have evidence of sending high-quality goods. You also should effectively pack the item to prevent damage during transit.

If you are confident you sent a high-quality item to your customer, who claims you did not, you can use the evidence gathered to prove they are deceptive before denying their refund.

Limit the Employees in Charge of Payments

Quickly and easily find the culprit of fraud by limiting the number of employees in charge of your online business’s payment operations. If, however, you are only running an online company with a co-founder, ensure they are aware of the various scam protection methods.

Call Your Customers

Prevent your customers from deceiving your company by confirming their order information over the phone. For example, you could ask them if they have chosen the right size and color for their needs.

You could also call them the day after they received an order to ensure they are happy with the product they received, which could prevent them from complaining a week or more down the line once they have changed their minds.

Track Every Parcel You Send

Prevent your customers from tricking you into sending them another product by tracking every parcel you ship. Most postal companies will provide tracking numbers, so you can use the ID to monitor its transit and identify when a customer has accepted a parcel, and it will provide your business with proof that they did receive an order.

Author: Chakraborty

Dr Chakrabarty is the Chief Innovation Officer of IntuiComp TeraScience. Earlier she was Assistant Professor of Delhi University, a QS ranked university in India. Before that she has held research positions in IITs and IISc. She holds 2 patents and over 20 publications in her name. Her area of research is in smart technologies, integrated devices and communications. She also has a penchant for blogging and is an editor of Business Fundas.