By Nicholas Cucci
Network Merchants Inc.
The holiday shopping season has ended, meaning it's time to crunch the numbers. I'll close this article with some sales trends of note from this year. But we can already say that early sales figures for the 2012 holiday period showed improvement over 2011, with early online shopping rising 12 percent year over year. With Cyber Monday deals and Amazon Prime accounts, who needs to wait in line?
The advent of discounted shipping arrangements like Amazon Prime has hurt traditional retailers like Best Buy Co. Inc. For a yearly fee, Amazon Prime account holders get free two-day shipping or discounted overnight shipping on eligible products. Not surprisingly, Best Buy, once a high-flying consumer technology store, shut 50 stores in 2012 to cut costs.
With more people using credit cards and online shopping growing exponentially, fraud is inevitable. When data becomes available, I expect to see a jump in the volume of credit card numbers reported stolen the day following the most recent Cyber Monday, or what I call "Cyber Theft Tuesday."
According to the Association of Certified Fraud Examiners, self-service machines at checkout stands will most likely be the culprit. These machines in retail stores incur the most fraud. And more of these self-checkout machines are being installed as stores reduce operating costs. We, in the payments industry, have a stake in helping our merchants make sure their e-commerce and retail store transactions are secure.
Here are a few tips to help your merchants any time of the year:
2. Update systems: Merchant systems should conform to the Payment Card Industry (PCI) Data Security Standard (DSS), as well as take further precautions to protect against fraud. Make sure your merchants understand that both you and they have a responsibility to protect customers' card information.
The PCI DSS focuses on protecting cardholder data. Business owners who choose to store cardholder information have an obligation to protect that data. They must restrict access to sensitive cardholder data based on business needs, making sure that absolutely no one can access it without appropriate safeguards. Businesses that store card details must use both encryption and masking, so anyone gaining access to card data will not be able to make use of it.
3. Visually inspect PIN pads regularly for physical evidence of tampering: Retailers should look for discolored or faded swipe attachments, as well as make sure mag stripe readers function properly and have not been tampered with. Most of all, merchants should not let anyone drop in for unscheduled servicing of their machines. ISOs should make clear to their merchants that updates and servicing will never be done without prior notice. This will solve most of ISOs' skimming issues.
Following are some sales trends for the 2012 holiday shopping season. According to surveys conducted by the National Retail Federation:
Also, the IBM Digital Analytics Benchmark reported:
Nicholas Cucci is the Director of Marketing for Network Merchants Inc., a graduate of Benedictine University and a licensed Certified Fraud Examiner. Cucci is also a member of the Advisory Board and Anti-Fraud Technology Committee for the Association of Certified Fraud Examiners. NMI builds e-commerce payment gateways for companies that want to process transactions online in real time anywhere in the world. Contact him at ncucci@nmi.com.
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