Fraud and theft continue to plague businesses in retail and hospitality. From employee theft and transaction fraud to inventory tampering, businesses face a significant loss in revenue yearly because of some form of fraud or another.
Fortunately, modern-day EPOS systems come with powerful tools to detect and prevent fraud, thus leaving a lot of room for business owners to protect their assets and maintain profitability.
In this educational blog, we shall review some of the ways in which EPOS systems guide protection against fraud and the specific functions that help businesses cut down the risk.
Understanding the Risks: Main Types of Fraud in Retail and Hospitality
Before plunging into how EPOS systems provide protection from fraud, we should first lay out the types of fraudulent activities that businesses experience:
- Employee Theft
Takes place when an employee uses their position or connection with a business to benefit financially from it or cheating the business out of that position’s potential gain. Employee theft represents a significant portion of the losses experienced by retail and hospitality businesses. Common forms include:
- Unauthorized discounts and voided transactions
- Pocketing cash from unrecorded sales
- Giving away free items without authorization
- Transaction Fraud
Chargeback fraud or friendly fraud, the use of counterfeit currency, and the manipulation of digital payments are a few examples of this.
- Inventory Theft and Shrinkage
Employee stock shortages, retail stock shortages, or stock shortages attributed to clerical errors can reduce the profitability margin significantly.
- Refund and Return Fraud
In most cases, a customer (or even employee) could exploit overly generous refund policies and obtain cash for items stolen from the store or items that they claim are defective.
- Data Theft
In addition to breaches in security Cybercriminals often target businesses that collect or hold customer payment data; stealing this information can cost something significant.
How EPOS Systems Help Prevent Fraud and Theft
Help deter undesirable behavior through built-in functionalities aimed at monitoring performance and assisting businesses in staying one step ahead of fraudsters.
Here’s How EPOS can help:
- Using User Permissions and Role-based Access Control
Restricting access to particular features of the EPOS is one of the most effective ways of preventing internal fraud. This feature allows businesses to provide role-based access to employees, with only the relevant permissions assigned to certain users in processing critical functions, such as issuing refunds, voiding sales, or giving discounts on products or services.
- Real-Time Transaction Monitoring
Modern EPOS does real-time tracking of transactions where the business manager can monitor sales, refunds, and cash-handling activities instantaneously. Certain things raise flags for investigations—such as above-average voids or very high refunds processed by the same person.
- Digital Receipts and Alerts
Digital receipts being issued on every transaction become a hard background for employees or customers attempting to “fix” their paper receipts and present them for credit. Management can also receive alerts whenever abnormal transactions get carried out through automated alerts.
- Integrated CCTV with Audit Trails
Some EPOS solutions may integrate with CCTV cameras in which transactions are connected to footage. When discrepancies arise, the manager can cross-check transaction logs against footage to verify if there is any suspicious behavior.
- Biometric or Secure Logins for Employee Accountability
To prevent employees from using each other’s login credentials to manipulate transactions, EPOS can incorporate fingerprint scanning, face recognition, or unique PIN codes. This links every action that takes place within the system to an exact employee, which discourages some fraudulent activities.
- Cash Drawer Management And Automated Cash Handling
One of the common forms of fraud perpetrated on a retail hospitality business is cash theft. Where the cash register is monitored by information systems like EPOS, each opening of the cash drawer has evidence attached to it, and the chance for a possible unaccounted cash discrepancy becomes extremely thin.
Additionally, automated cash handling solutions, such as cash recyclers, minimize direct employee interaction with money, reducing theft opportunities.
- Inventory Tracking and Stock Auditing
EPOS system provides real-time monitoring of stocks to help businesses actively track their inventory level accurately. All discrepancies against sales made and the remaining stock are flagged so that businesses can further investigate possible misconduct that may arise from stealing.
- AI-driven Fraud Detection:
The sophisticated EPOS system utilizes artificial intelligence to spot unusual patterns in transactions. While learning, AI traits can analyze trends, identify anomalies, and send automated alerts where case fraud is detected. In this way, businesses are able to preemptively prevent fraudlication.
- Payment Processing and Encryption:
Data security is given the highest consideration by businesses regarding card payments. Encrypted payment processing in EPOS systems allows customer card info to be protected from cybercriminals, minimizing data breaches risks.
- Customer Identification and Loyalty Program Protection:
There are quite a number of loyalty program frauds; for instance, counterfeits may create false accounts or make use of stolen rewards. The system should further be structured in such a way that it helps EPOS software verify customers; it keeps loyalty points or discounts from being applied to a non-genuine customer.
Trustworthy EPOS Providers That Prioritize Security
Choosing the right EPOS provider is key to ensuring fraud is prevented. Here are some of the most reliable companies providing secure and feature-rich EPOS solutions:
- EPOS Direct
EPOS Direct is well-established lead supplier of advanced EPOS solutions built primarily to take into consideration security and efficiency. They provide real-time transaction monitoring, role-based access controls, and AI-enabled fraud detection-intelligent choices for companies looking to minimize risk and increase security.
- LightSpeed
Lightspeed offers cloud EPOS solutions, which include built-in fraud detection features. Advanced analytics enable them to assist businesses with spotting unusual activity to obviate potential losses.
- Square
Square EPOS systems are user-friendly and provide top-level security, including end-to-end encryption and secure processing of payments.
- Clover
Clover provides flexible EPOS options fitted with built-in fraud detection and employee monitoring features, making it a great option for small and large entities alike.
Future of Fraud Prevention with EPOS Technology
EPOS systems are expanding possibilities and developing technologies equipped for even better fraud prevention. Some trends include:
- Blockchain Integration: Locking down security and transparency in transactions.
- AI-powered Risk Scoring: Real-time assessment of risk for transactions.
- Enhanced Biometric Validation: Disallowing unauthorized access to the system.
In Conclusion
Fraud and theft give nightmares to businesses; however, with the right EPOS, they can mull down great risks.
With features like real-time transaction monitoring and AI-powered fraud detection, modern EPOS solutions come stacked with tools for businesses to protect their revenues.
In this sense, an advanced EPOS system with strong features of fraud prevention allows doing business with confidence that assets are protected.
Reach out to EPOS Advisor today for professional insights and solutions with a personal touch.