The Green Sheet Online Edition
December 12, 2012 • 12:12:02
Crunch time for holiday shopping data
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.
'Tis the season of skimming
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:
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1. Monitor transactions closely: Make sure to capture signatures when required. Over specific dollar amounts or in case of a questionable purchase, ask for an ID and be sure to copy the ID with the transaction receipt. This will help a merchant prove in a chargeback case that the customer was present. Don't hesitate to deny transactions that do not feel secure. By monitoring these precautions, merchants will find trends regarding where cards can be breached and minimize the number of customers affected.
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.
Fun facts
Following are some sales trends for the 2012 holiday shopping season. According to surveys conducted by the National Retail Federation:
- 27 percent of consumers shopped online on Thanksgiving Day.
- 47.5 percent of consumers shopped online on Black Friday.
- 41.3 percent of consumers shopped online on Cyber Monday.
Also, the IBM Digital Analytics Benchmark reported:
- The percentage of consumers using mobile devices to visit retailer websites is 28 percent, a 10 percent increase over 2011.
- Online sales on Thanksgiving 2012 rose 17.4 percent over turkey day 2011.
- Black Friday's online sales were up 20.7 percent over the prior year.
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.
Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.
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