Employee Surveillance

Credit Card Fraud Prevention: A Successful Retail Strategy - Barry Masuda

Credit card fraud can be a major source of loss for business and credit card companies. An appliance retail company, Tops Appliance City, lost $1,121,000 in 1991 from credit card fraud losses. The majority of these losses came from their in-house Tops Card. The average value of a fraudulent transaction was $962. Tops identified four types of fraud they were experiencing:

1. True name fraud - opening an account using false information
2. Non-receipt fraud - stealing cards that are in transit between the credit issuer and the account holder
3. Telephone/mail order fraud - using stolen account numbers with different shipping and billing addresses
4. Counterfeit fraud - new cards are made using legitimate account numbers

In order to combat fraud, Tops wanted to shut down opportunities to obtain their card using false identification, prevent sale of merchandise using stolen cards, and increase the risk of being caught for thieves. Tops implemented a program to identify frauds in progress. Their strategy included training, profiling, procedural safeguards, networking, rewarding employees, and prosecuting offenders.

Cashiers were taught what fraudulent credit cards looked like and how these criminals often act when trying to commit fraud. People committing fraud often purchase things that can easily be resold (such as VCRs), make multiple purchases of the same item, carry the credit card separate from their wallet, and shop during peak times. By knowing what to look for and paying attention, employees were able to prevent credit card fraud. After the program in 1992, Tops reduced its loss from credit card fraud to $200,000! The increased employee surveillance also reduced check fraud.

This is just one example of how employee surveillance can prevent crime.

For more information about this case study, click here.

For more about preventing credit card fraud, click here.

For more information about surveillance (CCTV), click here.