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Remember ... SALES + LOSS PREVENTION = GOOD BUSINESS Credit and Debit Card Fraud Article contributed by Bill Cafferty, Retail Loss Prevention Consultant JUNE 2011 LP Corner A monthly publication brought to you by the Retail Loss Prevention department. Providing Ace Hardware retailers with professional, cost-effective loss prevention services since 1994. The vast majority of retail sales transactions are now being paid for with either a credit or debit card. The use of paper checks has become passé, and only a relatively small percentage of customers routinely use cash anymore; normally only those who either can't qualify for a credit or debit card or who have a predisposition not to use them. A survey published by the National Retail Federation earlier this year¹ reported that nearly 42% of all 2010 holiday season purchases were with a debit card, with another 28% by credit card, meaning that 70% of all purchases were paid for with “plastic.” Of the remaining 30% of sales, 26% were paid for with cash and 4% by check. What does all of this mean to you as a retailer? • First, it is important you know those who make a living stealing from others constantly adapt to the ever-changing methods of payment. The fraudulent credit and debit card business is booming today, and identity theft involving credit and debit cards remains on the rise (over 250,000 complaints of identity theft were received by the Federal Trade Commission in 2010). • Secondly, there have been a number of innovative steps taken by issuers of credit and debit cards to better protect card holders. It is important that you and your cashiers stay current and know/understand those enhancements as they occur. • Thirdly, there have been changes in policies regarding the processing of payments made with these cards that place requirements on retailers which must be followed, and can be very costly to the retailer if not followed. The credit and debit card industry has beefed up its internal security protocols; developed elaborate software designed to instantly alert them to unusual use and suspected abuse of cards; and is continually working on the development of more technologically sophisticated card features to make it more difficult for fraudsters to create and use bogus cards. Payment Card Industry Data Security Standards (PCI DSS) have placed strict requirements on retailers to protect the privacy of credit and debit card holders and reduce the opportunity for theft and misuse of card numbers. One PCI DSS requirement is a mandatory self-assessment by retailers to assess their level of compliance with the program. The other requirement is to have a quarterly network IP scan conducted. Ace Hardware's guidance regarding PCI DSS can be found on ACENET/ACEONLINE. All PCI-related questions should be directed to Cathy Nelson, Ace PCI Administrator, 630-990-2814, [email protected]. The Federal Trade Commission's (FTC) RED FLAGS RULE places a requirement on certain businesses to implement a written Identity Theft Prevention Program that is designed to detect the warning signs–or “red flags”–of identity theft in their day-to-day operations. Businesses that provide in-house consumer accounts designed to permit multiple payments or transactions–or any other account for which there is a reasonably foreseeable risk of identity theft are subject to this law. Please go to http://www.ftc.gov/bcp/edu/microsites/redflagsrule/index.shtml for detailed information on your responsibilities, if any, under this federal law. 31_114722_0611 1 Announcements & Upcoming Events Training: • Join RLP at the Denver Convention for a full-day owner/manager workshop! • New Ace LearningPlace Training Available ° 14 — NRHA Loss Prevention: External Theft Prevention for Managers ° 13 — NRHA Loss Prevention: Store Safety for Managers • FREE Webinars ° Retail Theft Scams ° Shoplifting Awareness CONTACT US FOR MORE INFORMATION: Phone: (630) 972-2670 www.acelossprevention.com
