For merchants, the UK summer holidays usually mean one thing: a huge increase in payment traffic, with many relying on the summer months when people kick-start vacation planning. An unwanted by-product of this surge in payment traffic shows up in dispute charges from customers uncertain of purchases they may have or have not made.
As a nation, Britain takes more than 45 million holidays abroad every year and spends more than £30bn, with the average family expected to spend £1,284.54 per person on their summer holiday in 2017.
As a business, your success relies heavily on one key thing—meeting the needs of your customers within a time frame that suits them (usually as quickly and as efficiently as possible). The boom in online sales and businesses over the past 10-15 years has given consumers far more choices, and with this comes the opportunity to create their dream vacation or trip.
This can often come at the expense of merchants, who must now contend with multiple purchases for a single trip—from booking the hotel and travel plans to day trips, and that’s before you consider food, travel essentials, and holiday clothes. It’s a far cry from one single big ticket item and places a greater emphasis on you as a merchant. Ensuring your customer authentication and authorisation processes are strongly positioned stands as a major factor in mitigating the increased risk.
Booking fraud is one area in particular that we have seen huge growth in the UK, with 5,826 reported cases in 2016 (20% increase year-on-year), according to the UK’s national fraud and cyber-crime reporting centre ActionFraud. The most common forms relate to airline tickets, online accommodation, and timeshare sales.
What Can Merchants Do to Help Prevent Dispute Charges and Online Fraud?
It has been said that prevention is better than cure, and this certainly applies to managing fraud and dispute charges for merchants. Online fraud and chargebacks, while avoidable, are easy to become a victim of, particularly when you are at your busiest and customers are desperate to purchase their dream vacation.
Some key considerations should be made when questioning the potential for fraudulent transactions and dispute charges, including:
- Rushed purchase – Often a fraudster will contact you in a panic, rushed to set up accommodations for their traveling. Make sure you take the time to validate the credit card, passport details, and other relevant verification documents. If you’re operating your business without a proven payment solution in place, be cautious of the credit card being used—often these fraudsters are using stolen credit cards
- First-time customer – Folks who regularly travel often establish a relationship with a specific travel company, allowing the merchant and the customer to build on that relationship which fosters customer loyalty. Be aware of a first-time customer who calls you or contacts you online to make a large purchase. As always, collect all necessary verification information, and especially take advantage of a merchant payment solution such as Verifi’s Order Insight to help prevent chargeback fraud.
- Customer location – We’ve all heard the stories of Internet requests for money transfers to a foreign country or the plea to send money to free a trapped relative. Today’s fraudsters have learned that VoIP phone service can be the ideal tool to hide their true location, tricking a sales agent into believing they are calling from a local number. If you have concerns over the customer’s location, seek to provide for the customer to come into your shop to pick up goods or services, or request a signature for delivery.
- Conflicting transactional information – One of the most common fraud techniques is using different addresses for billing and shipping. When a customer enquires about a safari package, for example, but wants the tickets delivered to an address that is different from their billing address, red flags should go up.
The travel industry, much like any other industry, is not immune to fraud and dispute charges. Modern technology makes payments easier than ever before, making it even more important for merchants to be extra vigilant and implement the right techniques to protect themselves and their customers.