Did You Factor CRIME Into Your Business Plan?

One of the biggest things that I’ve ever overlooked in business is crime. Call me naïve, but I thought that running online businesses was a good way to avoid the age-old problem of shoplifting and general theft associated with running a high street shop. How wrong was I?

Fraud is everywhere

My main business revolves around ecommerce – what I didn’t bargain for when I entered the industry was anywhere from 1% – 5% of customers claiming their items don’t arrive. Of course a portion of these customers will be telling the truth – the Royal Mail (our carrier of choice) handles millions of letters, large letters and parcels each day – it stands to reason that a fraction of items that go into the system never come back out for one reason or another.

Aside from the items that genuinely get lost, a lot of the people who claim items don’t arrive are actually scammers – fraudsters – thieves, whatever you want to call them. Pretty soon after entering ecommerce I realised these people existed, but as time goes by we seem to be getting hammered by the scammers on a daily basis. What started out as a couple of pounds each week has mutated into several hundred pounds each month – that money goes straight out of my business, straight into the hands of the thieves and cheaters.

With the amount of money that we’re now losing to “missing items” I could have hired a part time packer – which would have been a huge help for the business.

How can I be so certain about crime?

When we tell our customers that all cases of postage fraud are reported to the police, we get some pretty shocked/panicked responses. Most of these scammers think they’re waaaaaaay to clever to ever get caught, but the reality is that they’re not.

1. One customer purchased from us on multiple occasions claiming her items didn’t arrive. On further investigation I noticed her bragging on Twitter to all her friends about the scams she was pulling off – complete with photos of the items that we’d sent out to her! Naturally, she was reported to the police who took action.
2. Another customer claimed the items we sent didn’t arrive – over two separate transactions, months apart. I told her the probability of that happening was less than 0.5% and that she was going to be reported to the police. Miraculously, she managed to find the item in less than five minutes after my email – it turned up in her wheelie bin outside! Apparently the postman forgot what a letterbox looks like.
3. Yet another customer claimed her items didn’t arrive, again she made multiple purchases from us, trying to use the same old scam time and again. All I asked was for her to confirm her full address and she accused me of accusing her of trying to defraud us of stock – I did no such thing. That set alarm bells ringing so I trotted out the old line of “you’ll be reported to the police at 9AM”. Amazingly she claimed the items subsequently arrived at about 3AM – before I had the chance to notify the police. Funny that, eh?

I could write down case studies all day long of customers who think they’re smarter than we are. What they don’t realise is that we deal with scammers all day, every day. We’ve got their cards marked, the software and tools that we have available to us nowadays make fraud prevention a lot easier (although they don’t eliminate it entirely) – we can spot scammers a mile off.

The easiest answer to dealing with people that claim items don’t arrive is to send all items by a tracked or recorded delivery service. The problem with this is that it’s not cost effective for the majority of businesses, mine included. One observation I’ve made when sending items tracked is that scammers will simply return them because their scheme didn’t work – for the trouble that you’ve caused them they’ll usually smash the item to pieces before sending it back, just so they still get their kicks. No matter how hard you try, if they want to get you, they will!

Whether you’re planning to start a high street shop, an ecommerce business or any other kind of venture – remember that crime does exist, and no matter how clever you box, you’re likely to become a victim of it at some point or another. Our number one tip is be vigilant at all times – if you have good reason to suspect your business is being targeted by criminals whether they’re fraudsters or thieves, inform the police – that’s what they’re there for.

Scoepages Tags:fraud,crime,Business Plan

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