By Don Bush
For many, the new year brings a fresh start, a clean slate. Unfortunately, many merchants without a fraud strategy in place soon will realize they were on the naughty list during the previous holiday season, becoming a victim of a nasty side effect of fraud: chargebacks.
Chargebacks are a huge issue for merchants after a busy holiday retail season. And many merchants won't know if they were victims of higher fraud during the holiday season until the end of the first quarter of 2018. By the time chargebacks get fully reported for the 2017 holiday season, merchants are 60 to 90 days or more down the road.
Not only will they have missed the chance to stop fraud, but an audit to identify the cause of that fraud will be expensive and difficult. In fact, it may be impossible to learn enough from those aged transactions to prevent a future attack by the same methods. In addition, the lag in chargeback reporting means companies' financial reports will show a distorted picture of performance. Those great sales and profits seen in December could turn out to be ugly losses in February, March and April.
For businesses seeking the best ways to protect themselves in 2018, there are many ways to stay a step ahead of fraudsters to curb chargebacks and remain fraud free throughout the entire year. Read on for five tips for merchants who are evaluating their fraud strategies this year.
While merchants work to prevent fraud and its side effects, they also must ensure their systems aren't stopping legitimate sales in the process. The goal of most online (and brick-and-mortar) businesses is to grow revenue, increase market share and maintain an expanding base of happy customers. Expanding into new markets, adding new products or reducing manual reviews can help or hinder growth, depending on what fraud strategy is behind each goal.
Some businesses think that blocking transactions from one particular region, or stopping sales via one specific channel that has higher fraud rates than the rest, will allow them to sidestep fraud. But this thinking will hurt them in the long run. Merchants need to find a solution that gives them the confidence to sell more products to more people in more places and expand revenue opportunities – mitigating fraud, but boosting overall sales.
Don Bush joined Kount as Director of Marketing in October 2010 and became Vice President of Marketing in December 2012. Previously, he was Director of Marketing at CradlePoint, a leading manufacturer of wireless routing solutions in the mobile broadband industry. Don has worked in several management roles within the technology segment for over 20 years with both hardware/software manufacturers and as a partner in two top technology marketing agencies. He has led products launches and marketing programs for dozens of companies around the world such as Citi, HP, IBM, Kodak, Motorola and Weyerhaeuser, and he co-authored the seminar series Common Launch Disasters and How to Avoid Them. Contact Don at firstname.lastname@example.org or visit www.kount.com.
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