The goal of a fraud prevention service is to detect and prevent activities that put the finances and reputations of both your business and your customers at risk.
Quite simply, it’s the use of deceitful methods to acquire something of value.
With the increasing presence of omnichannel retail, customers are empowered to browse items in one location, pay somewhere else, and return them from anywhere. But unfortunately, with this increase in customer convenience the opportunities for fraudulent actors have also grown exponentially.
That means now more than ever, retailers must defend themselves against fraud. Without the right protection, they’re at risk of losing USD130 billion in revenue from fraudulent, card-not-present transactions alone between now and 2023.1
1According to a forecast from Juniper Research.
With fewer purchases occurring in brick-and-mortar stores and retailers promoting frictionless omnichannel transactions, e-commerce fraud is on the rise, both in scope and in the range of activities and techniques. To start protecting your business, you must understand and be able to identify these common types of retail fraud:
Without the right fraud prevention services, retailers risk lost revenue, customer distrust, and reputational damage from a successful attack or security breach. Businesses of all sizes are vulnerable in an omnichannel retail environment.
Consider the harm inflicted on your business and customers when credit card information is stolen or sign-in credentials are exposed. These events can mean lost revenue and long-lasting damage your brand. In addition, stolen personal information can result in poor credit ratings and can haunt your customers for years by impacting their ability to apply for loans, mortgages, and other forms of credit.
While developing an omnichannel strategy is an essential component in today’s retail landscape, doing so while also focusing on fraud prevention is critical. With that in mind, these immediate steps will help you spot red flags and discourage fraudulent actors:
Keep scrupulous records of all transactions, wherever purchases occur.
Confirm credit card credentials, including security code, when payments are made.
Contact credit card issuers if you detect any suspicious behaviour or transactions.
Educate yourself about the types of fraud and how fraud prevention services can protect your business.
While customers want a consistent shopping experience across all channels, retailers still need a consistent way to authenticate customers’ identity. This type of authentication is still in development, but there are sophisticated fraud prevention technologies you can put in place now.
For example, look for fraud detection and prevention services that employ machine learning. This deep-learning technology is able to recognise and learn from complex patterns. It detects relationships through a holistic view of fraudulent activity, and is far more accurate than rules-based tools.
Cross-channel shopping gives bad actors more opportunities than ever to commit fraud.
However, by identifying patterns of fraudulent activity, fraud prevention services can effectively detect and stop it. As a result, businesses that use these services gain three key competitive advantages:
Remember that fraud detection isn’t a static process. By using technologies like AI and machine learning, these services automate previously manual processes, combining large data sets and employing analytics to generate easy-to-read reports with actionable insights. This is key—rather than using a fixed set of rules, today’s fraud prevention services involve continuous learning, so improvements are always being fed into the system.
Once you’ve decided to implement a fraud prevention solution, what capabilities should you look for—and how will each help protect your business and customers? Here are some features to consider:
Purchase protection: Helps safeguard your online revenue by increasing bank acceptance rates and reducing checkout friction that can result in abandoned carts.
Account protection: Safeguards your reputation, revenue, and customer accounts by preventing fraudulent account access, fake account creation, and account takeovers by bad actors.
Loss prevention: Empowers store managers and investigators to take action and prevent loss by quickly identifying potential fraud on returns and discounts for omnichannel purchases.
In addition to these capabilities, you’ll want to evaluate whether a potential fraud protection service is a standalone solution, how it will integrates with your other retail technologies, what type of reporting it generates, how it supports a seamless customer experience, and whether there’s technical support available, in case you need it.
Since customers now have more shopping choices than ever before, it’s critical to mitigate fraud so you’re able to increase revenue while protecting your reputation. Fraud protection services can help you do that—while at the same time reducing your operational expenses and increasing bank acceptance rates.
Microsoft Dynamics 365 Fraud Protection helps online retailers diagnose transactions, evaluate fraud potential, and protect their business with customisable rules to obtain recommendations for e-commerce transaction decisions.
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