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The Keys to Stopping BOPIS Fraud

It’s pretty clear.

Many shoppers opt to “Click and Collect” or “Buy Online, Pick Up in Store” (BOPIS) to avoid shipping costs, ensure their purchases were correct, and to get items sooner. The increased interest is why mega retailers, Target and WalMart plan to expand their BOPIS services. By the end of 2018, both retailers plan to expand their click and collect service to 1,000 stores.

As the demand has increased for this service option, so has the number of cybercriminals that have used it as another opportunity to attack. Though this was once considered a safer option for shoppers, fraudsters have found a way to exploit it. To combat this, retailers must be vigilant in protecting its consumers. Retailers must take all of necessary precautions, including getting chargeback insurance, utilizing a chargeback mitigation tool, or a combination of multiple actions.

Tips to Trim BOPIS Fraud

Retailers need to search for problems or red flags at the beginning of the transaction to stop fraud. First, retailers must ensure they are correctly identifying shoppers when they log in to make a purchase. The best way to stop BOPIS fraud is to identify customers through their behaviors by using physiological analytics and passive biometrics, which include voice, facial, and iris recognition techniques.

Unlike conventional data security measures, which are limited to user acceptance and discretion, passive biometrics do not require a user to provide credentials. Like the name suggests, passive biometrics collects user behaviors passively. E-commerce companies that identify shoppers behaviors and interaction patterns are able to protect their accounts with inconveniencing them. So, for example, ecommerce businesses identify consumers by the way they interacts during purchase sessions, such as, looking at keystroke deviation and input speed. Even the way a device is held is a window into determining whether it is being done by human or a non-human.

As ecommerce companies build a larger user profile, its system uses the information to compare it with login occurrences to a database. The comparison helps identify and authenticate user behavior. This approach coupled with a multi-layered security solution offers a nice balance of convenience and data security.

Challenges with BOPIS

Businesses also need to be more careful in identifying customers with the in-store pickup portion of this service option. Many stores only require an ID or a confirmation number to pick up an item at a store. Also, it is not rare for a shopper to make a purchase as a “guest” instead of registering personal information. Shopping as a “guest” makes it easy for fraudsters to use their names, so the ID shown to store representatives match and no one is suspicious. To make buying online and picking up in the store safer, retailers will have to come up with a better way to authenticate shoppers during pickups.

Other Ways to Limit Fraud

It is critical that all businesses take steps to prevent fraudulent purchases. Fraud leads to chargebacks, which are when credit card brands demand retailers fund the cost of a disputed or fraudulent purchase. Excessive chargebacks can cost you your merchant account, which impacts your ability to accept and process credit card payments. Once a merchant account provider terminates an account, it is very difficult to get a new one.

Chargeback insurance and chargeback mitigation programs also are good ways to protect businesses against fraud. (EMB) is a high-risk merchant account provider that takes chargebacks seriously. It offers a chargeback mitigation program, Chargeback Shield, that can prevent one in four chargebacks. EMB partnered with Verifi, its Cardholder Dispute Resolution Network (CDRN), and Ethoca’s alert system to create a system that allows businesses to resolve credit card transaction disputes directly.

In addition to offering chargeback mitigation tools and fraud protection, EMB makes the merchant account process simple. It online application is simple and easy.
*Chargeback Shield is not an insurance service. EMB does not sell insurance and Chargeback Shield is not insurance; it is an alert system.