Sonitrol Security

Sonitrol Commercial Security Blog ... by Joe Wilson



How To Protect Your Business From Consumer Fraud

Posted by Joe Wilson

Mar 26, 2015 6:22:00 AM


ConsumerFraudMarch is fraud prevention month in Canada and I thought we should end our series of fraud blogs talking about consumer fraud and how it can impact a business and some of the basic security measures you can take to prevent this type of fraud.

Consumer fraud is a well-known practice that typically results in financial losses for consumers.  But did you know there are also types of fraudulent practices committed by consumers that can have a devastating affect on your business?  

Here's a summary of some of the most common consumer scams that may be aimed at your business and you need to do what you can to minimize your business risk.


Consumer Fraud

Small businesses and medium sized businesses are at definitely at risk from common fraud schemes committed by “customers.”  

There are many frequently used schemes implemented by fraudsters in an attempt to get money or products from your business. The common scams are writing bad cheques, passing counterfeit bills, using stolen credits cards or even returning items not purchased from your store. 

Avoid becoming a victim of these fraud scams by implementing a series of preventative measures and educating your employees. 

Here's what I recommend you can do to prevent these scams.


Stolen Credit Cards

“Chip and pin” is one of the most effective ways to prevent credit card fraud in your business.  Accept the secure chip and pin method whenever possible and be aware of how many times a customer attempts to re-enter their pin.   Moneris Solutions, a leading merchant credit card system, recommends the following fraud prevention methods for handling credit card transactions:


When A Credit Card Is Not Present With Online or Phone Orders:

A lot of these scams revolve around customer behaviour, the more you understand and watch the patterns, the better prepared you are against consumer fraud.  Take notice of purchases that include high-priced items, or large quantities of the same item, and be wary of customers who request express, next-day delivery and always watch for customers who make purchases using multiple credit cards.


When A Credit or Debit Card is Present In A Face-To-Face Retail Setting 

I recommend using CCTV cameras to keep an eye on customers who appear nervous or those who are making unusual purchases from your business, such as several high-priced electronic items at a small convenience store. Watch their behaviour when they approach to pay, fumbling their wallet, waiting for a distraction, expecting an error and getting defensive are all signs of nervousness around the point of purchase.

If customers have a Chip & PIN on their card, be aware of the number of times they are attempting to enter their PIN or re-inserting their card to try again. If they do not have Chip & PIN on their card, be sure to validate the date, hologram, security code, and signature panel on their credit cards. All too often junior store staff don't do this, therefore we advise you to have good credit card acceptance procedures in place.

For manual transactions, always take an imprint of the card, but we strongly recommend moving away from manual swipe machines, as it is really easy to take advantage of them. 


Bad Cheques

If your business still accepts cheques, you can reduce your risk of fraud by implementing the following policies:

·      Specify a maximum payment amount to limit the total amount of purchase

·      Ensure the name and address are verified with valid identification

·      Implement a returned cheque fee to cover any costs incurred and also deter customers from writing a bad cheque

·      Accept only first-party cheques; third-party cheques are more unreliable and can be difficult to collect

·      Accept cheques from local customers only


Counterfeit Bills

Canadian currency has many security features that will help you identify counterfeit bills.  The new style of currency is made of polymer notes that make counterfeiting more difficult and easier to verify.  We recommend you develop a policy about how you handle US currency, size of bills, transaction size, profile of person etc. 

You can educate your staff on how to identify counterfeit Canadian bills by following these recommendations made by the Canadian Bankers Association:

  • Feel the polymer note to look for a smooth, unique texture and raised ink on the large number, portrait, and words ‘Bank of Canada’
  • Look for items including details in the metallic portrait and large window, matching numbers in and around the large window to match the denomination of the bill, and check to make sure the there is a maple leaf border around the large window
  • Flip the bill to ensure security features are the same colour, with the same details, on both sides of the bill

Visit the Canadian Bankers Association or Bank of Canada for more information on identifying counterfeit bills.


Return Process Fraud 

Purchasing merchandise from one store and returning it to another, or even returning used merchandise for a full refund, are both types of commonly used fraud schemes that can affect your bottom line.  “Free renting” or “wardrobing” are common terms associated with return process fraud, since customers may purchase products with no intention of keeping them.

Protect your business from this type of fraud by creating and implementing a return policy that is both fair and transparent.  Your return policy should indicate the period of time you will accept returns, as well as your policy on returns without a receipt.  You can also install a point of sale program to help track sales and returns, alleviating staff accountability for returns and helping to streamline the returns process.

Consumer fraud is part of your overall security concern and these tips will help to reduce it. 

Our goal is make businesses like yours safe, by implementing quality security systems that can not only protect your business but also help catch the criminals.

Contact us today for your free security assessment to help your reduce your risk from internal and external threats.



Commercial Security Experts!


About Sonitrol Western Canada:

We're so confident in our technology and responsive service, that no one else in the industry can match our guarantee.  Our unique verified audio and CCTV video business security solutions enable our operators to hear and see what is happening in your business before the criminals gain entry!!  We verify the actual source of the alarm, and we get the police to attend the scene immediately.  FOR A FREE SECURITY AUDIT, click here, or call 1-866-766-4876 - We are a security company with over 150 offices across North America serving clients across Western Canada in British ColumbiaAlbertaSaskatchewanVictoriaVancouver EdmontonCalgarySaskatoon.


Sonitrol Western Canada, with its Verified Electronic Security Systems, is committed to providing customers with the most comprehensive security protection.  Cooperation in the elimination of false alarms is not only beneficial to the system’s user, but results in better protection of the entire community by allowing law enforcement to use their resources as efficiently as possible.


Topics: Retail Security, Office Workplace Security

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Joe Wilson, Owner of Sonitrol Western Canada

We provide our customers with the best commercial security solutions and quality service backed by our unique Guarantee and Commitment to Service. It's something unverified conventional alarm companies simply cannot guarantee!

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