Protecting online gift card transactions
Businesses cannot prevent people from losing their credit cards or from having their email (with electronic cards) hacked on insecure Wi-Fi networks. But they can try to protect the transactions that often lead to fraud losses.
One way cybercrime can be prevented is by analyzing online gift card purchases for the presence of stolen credit cards. These can be detected through a variety of risk factors, including a single device using several different credit cards or a transaction where the actual location of the device does not match the credit card holder’s address. Businesses should subject these transactions to additional scrutiny or real-time step-up authentication.
Gift card fraud is a form of identity fraud – the fraudster typically pretends to be someone else when purchasing and/or reclaiming the gift card. So businesses must look for transactions where the device does not match the individual’s history or is disguising its location, or for which a shipping address has been changed.
Fortunately, retailers don’t have to tackle cybercriminals alone this holiday season. One of the most effective ways to protect gift card transactions and user accounts this holiday season and beyond is by leveraging a global repository of fraud data to differentiate between authentic and fraudulent transactions. Retailers can collaborate with other businesses to share information about accounts, devices and online personas involved in fraudulent activities – escalating any transactions from these sources to a higher risk category and requiring additional screening.
Leveraging a global repository of fraud data also helps retailers strike a balance between implementing effective cybercrime prevention strategies and interfering with the customer experience. By differentiating between low and high risk transactions, retailers can assure accounts and gift cards are protected without making trusted customers face arduous authentication steps.
The gift card challenge will linger long after the last gift is unwrapped this year. Gift cards are a popular year-round vehicle for fraud. The good news is that any protections retailers and other businesses put in place for the holiday season will protect against potentially fraudulent transactions year round.
By subscribing to our early morning news update, you will receive a daily digest of the latest security news published on Help Net Security.
With over 500 issues so far, reading our newsletter every Monday morning will keep you up-to-date with security risks out there.