How A Merchant Can Protect Himself From Unscrupulous Buyers

Today, shoppers have a wider choice than ever before of payment methods for buying goods and services online. And the more different devices and payment methods appear, the more practices of merchant fraud are created by scammers. And nowadays, fraud is already an entire industry that uses both complicated methods and trivial ones, and merchants need to have a tool, like Covery solutions, to protect themselves.

What are the main types of fraud faced by merchants?

The COVID-19 pandemic has changed shopping trends and consumer behavior. Because of growing security concerns, most consumers have changed the way they pay. Consumers in Europe, in USA, around the world have shopped online, and as more consumers make e-commerce purchases, fraud attempts related to chargeback card transactions have increased. During the pandemic, the number of frauds and money laundering has only increased. 

The first risk worth mentioning is friendly fraud. This happens when a customer buys a product with his payment card via some online service, and then claims that the product has not been received. The seller will have to return the money to the customer, and so lose the goods as well. 

There is also a fraudulent return. Occurs when a dishonest buyer uses fake information for delivery, and then demands a refund from the merchant for unreceived goods. Often, along with a refund, buyers get some kind of compensation (certificate, discount, etc.). And that’s a few of the most famous merchant fraud schemes we’ve looked at. 

Methods to protect your business from unscrupulous consumers

To protect your business from unscrupulous consumers and to reduce the risk of losing money, follow our tips. They will help you to build effective protection, using Covery solutions, and reduce the risk of contacting scammers who engage in money laundering or other merchant fraud schemes.

Provide consumers with complete information about products or services in a timely manner

Develop templates for contracts, which will consider the maximum number of nuances for your type of activity. Create memos and instructions on how to use the goods, the terms of service. Make them annexes to the contract and give them to the consumer only against a signature on your copy. If you provide service or perform work, be sure to sign certificates of acceptance of work.

Don’t skimp on video surveillance

Install video cameras in retail locations, restaurant halls, and other areas where customers or customers are present. Video footage will confirm your rightness in case of ambiguous situations with the consumer.

Train your staff

The merchant fraud strategy of unscrupulous consumers is often built on the use of mistakes made by rank-and-file employees. Correctly acting personnel can slow down the development of the conflict already at the initial stages.

Keep records of claims and respond to each of them.

Failure to respond to a complaint, even if it is a scam message, unleashes the hands of unscrupulous citizens. A competent answer with references to the law, on the contrary, will make the consumer think about the advisability of further pursuit of the company.

Watch your reputation

React to negative scum reviews on the Internet and in the media. If an unscrupulous consumer has posted a negative review of your company on the Internet and is blackmailing you, do not rush to apologize. Inform the client that you intend to deal with the situation, invite him to a discussion. After a while, be sure to post the results of the review of his claim. 

If you have problems – consult a lawyer

Faced with consumer extremism – seek legal advice as soon as possible. A specialist will help you develop a defense strategy and reduce your financial losses.

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