Seven Ways to Stop Enterprise-Wide Crime


By Jeff Liesendahl

CEO, Accertify

Fraud, theft and other crimes cost retailers more than $30 billion a year – a staggering number that has grown along with the economy’s troubles.

Retailers are well aware of the resulting damage to their profit model. What retailers often don’t realize, however, is that many types of retail crime are more than just “shrink” or law enforcement problems. They are also complex data management challenges that cut across retail locations, regions, channels and data systems.

Look at return fraud, as an example, which accounts for $12 billion a year in retail losses.  It’s a well-known fact that some customers buy expensive apparel or home goods and return the items  a few days later after using them for a special event.  Return fraud is at its worst over the holidays. One upscale home furnishings retailer experiences several million dollars in returns every January on merchandise purchased (and frequently used) during the holiday season.   

Merchandise returns become expensive for retailers in a variety of ways.  Shipping and handling costs are driven up by shoppers who order apparel in several sizes and return items that don’t fit, for instance.  Then there are fraudsters who order merchandise online and claim it never arrived. In some more organized and complex schemes, sophisticated fraudsters rent or purchase items online using stolen credit card information and return the goods in-store before the retailer is even aware of the bad transactions. 

Not all returns are fraudulent, of course.  But which customers are habitual returners and which returns are fraudulent?  The answer lies in retailers’ customer and transaction databases.  The problem is that many retailers lack the resources and technical capabilities to unlock the answer.

Retailers often have no idea that crime rings are working certain stores or certain regions until they have moved on to their next target.  Criminals succeed at card-not-present fraud, return fraud, workman’s compensation scams, affiliate fraud and other illegal activity because merchants are unable to get control of their data.  If merchants could aggregate the information contained in a variety of data files and different locations, then analyze and model it, they would be able to identify fraud patterns across the retail enterprise and stop criminal activity before it happens.

Law enforcement increasingly relies on databases with information on retail fraud and crime patterns as an effective and efficient deterrent tool.  Retailers and loss prevention specialists can significantly reduce crime by adopting the same strategy.

After a decade of experience helping merchants successfully prevent fraud, I’ve learned there are several key steps involved in managing data to prevent retail crime.   Here are the seven most important ones: 

·         Create a database that has the ability to aggregate a wide variety of data files in many formats to allow for identification of fraud patterns across the retail enterprise. Business rules can then be written to screen and flag suspicious activities in real-time.

·         Your data management platform should be flexible enough to let you update and modify previously submitted data, enable the deployment of unique screening strategies across multiple data sets and facilitate custom configuration and deployment models.

·         Utilize a layered defense. Don’t assume a single strategy is going to work. Criminals that manage to find their way around one tool or screening mechanism can be caught by another.

·         Optimize your case management process. Use a software platform that provides tools for customizing workflow, streamlining reviews and investigations and moving them to completion.  Your software should enable you to manage, prioritize and learn.

·         Maintain “negative” files based on fraudulent returns or other bad transactions that resulted in credit card chargebacks and automatically update them.  Also keep “positive” files so that you don’t flag good customers when their buying habits innocently make them appear suspicious.

·         Measure  outcomes.   When companies are faced with so many budget priorities, being able to measure your success will help you justify anti-crime investments.

·         Be able to adapt quickly.  Criminal schemes are always changing. Your defense system should also allow you to update screening mechanisms and incorporate new anti-fraud tools as needed, and without assistance from your IT department. 

These steps constitute a cost-effective approach for reducing many types of fraud across the retail enterprise.  They can be automated and integrated into a single software solution that combats fraud occurring online, through call centers and retail settings.


Using this approach, Accertify's Interceptas platform provides 
everything retailers need for successful fraud prevention across multiple channels and locations.  It is designed to mitigate a variety of enterprise-wide risks, including fraud related to payments, merchandise returns, exchanges, and other scams and cons.    Most importantly, reducing fraud and other scams will help retailers retain more revenue and improve profitability.


About Accertify®

Accertify Inc. is a leader in providing e-commerce companies with software, tools and strategies for preventing online fraud and mitigating enterprise-wide risks. Our Interceptas® platform integrates every component of fraud prevention, applies state-of-the-art automation to each step in process and offers advanced capabilities for managing fraud data. Built with a merchant's perspective, Interceptas delivers unparalleled flexibility in preventing various types of criminal behavior, including fraud related to card-not-present purchases, online scams and policy abuse, merchandise returns and exchanges and other data management challenges. Accertify is committed to providing online companies with the most cost effective solution to fraud available. Our clients include leading brands such as Southwest Airlines, eHarmony,, JetBlue Airways, Urban Outfitters,, Motorcycle Superstore, Simplexity, Mexicana,, and MonaVie.