How can a candy bar purchase cost a retailer hundreds? It could be happening in your stores right now if you offer cash back with a debit card purchase. A particular cash-back scam crops up this time of year as the holiday shopping frenzy kicks into high gear. It poses a significant retail risk, and it can be detected through advanced analytics.
Fraudsters select an overwhelmed cashier, often the busiest or the most inexperienced. Through a couple of transactions, often within minutes of each other, a legitimate receipt is produced, sometimes involving a self-checkout system.
With legitimate receipt in hand, scammers are able to get the maximum cash back by tricking the cashier into thinking he or she made an embarrassing or job-threatening error. They know the value retailers place on creating a good customer experience and take every opportunity to exploit this standard.
If you are an Appriss Retail client, contact your Customer Success representative for scam details and the Appriss® Secure query that allows you to identify where the scam is happening, which cashiers have been victimized, and techniques you can use to mitigate the impact.
Using Retail Technology to Find the Receipt FraudWhen scammers find a technique that works, they continue to run the fraud. They may hit the same stores over and over at different times of day, operate with multiple unfamiliar perpetrators, or they exploit several of your stores in the same region. Scammers will also exploit multiple retailers and are not particular to one brand.
If your cashier reports an incident, you have good data to start an investigation. If you have not yet received a tip, you can proactively create queries, but you may have to try a few variations on transaction amounts.
One technique is to use your exception based reporting (EBR) system to look for maximum cash-back transactions. (Fraudsters typically demand the maximum value.) Then review the transactions for mis-aligned data points, being careful to distinguish between what is suspicious and what is a good customer service.
If you are an Appriss Retail client, contact your Customer Success representative for scam details and the Secure query that helps you focus on where the scam is happening, which cashiers are involved, and ways to mitigate your losses. If you are an Appriss® Verify or Appriss® Engage customer, ensure you are using return authorization features appropriately to curtail receipt-based scams.
Use Cashier Coaching to Raise AwarenessDo not wait for scammers to hit your stores; start now and remind your cashiers to be alert for high or maximum cash back requests as well as error accusations. Cash-back is a wonderful option that enhances the customer experience, and it should not be something that makes consumers anxious or hurried. Any time the cashier gives cash back they need to pay attention to details and handle one step at a time.
Fraudsters contesting cash back amounts can usually be thwarted by a cashier who is focused and not afraid to ask a front-end supervisor for assistance. Scammers tend to interrupt the transaction while pressuring the cashier to skip protocol and go straight for the cash. Scammers develop an atmosphere of stress and self-doubt to perpetrate the scam, and they rely on shame and fear of reprisal to prevent the cashier from discussing the problem with the manager.
Cashiers who are victims—whether they provide a tip or are identified by analytics—should be targeted for constructive coaching. This can be more productive than firing the associate and hiring another inexperienced cashier who can be exploited.
Eric York, LPC, Client Success Representative, Appriss Retail
Eric York graduated from Northern Arizona University and launched his 25-year loss prevention career at Walmart. His extensive field experience and technical acumen made him the ideal field consultant for the client success department at Appriss Retail, which he joined in 2015. Eric helps clients around the globe maximize the value of their loss prevention investments.