For wireless dealers, the threat of wireless chargebacks, shrinkage, robberies and employee theft are constant concerns. But, you can defend your stores against these risks using a few best practices and modern technology that combines video with critical business data.
Take fraud via wireless chargebacks, for example. A single fraudulent cellular chargeback can cost thousands of dollars. And when it works once, perpetrators are likely to try it again and again.
To catch wireless chargebacks as early as possible, start by regularly watching for red flags. Look for customers who:
Are not porting an existing phone number to a newly purchased phone
Now of course, not every customer who throws one or more of these red flags is perpetrating wireless chargeback fraud. So, you must train your staff members to recognize the warning signs and take additional steps such as checking that IDs match credit cards. But will each of your employees across all of your stores follow these precautions regularly and consistently? By employing the right technology, you can find out.
There’s one thing you can count on: chargebacks and other fraudulent activity will always be a challenge and a threat to your profitability. But technology that combines video with business data can be a powerful tool for playing smart defense in your wireless retail stores.
What are Wireless Chargebacks?:
In wireless retail, a "chargeback" refers to a situation in which the service provider (Verizon, AT&T, Sprint ,etc.) takes back the commission they pay a wireless dealer on the sale of a phone. The practice of charging back a commission is the result of the service plan not being paid by the person who purchased the phone within the required contract terms. The impact on the dealer is significant because they purchased the phone for $700-$800 and sold it for a discount at $100-$200 expecting to make back the difference with the commission. Once the phone is out the door they will rarely recover it, so now they have a several hundred dollar loss on their books.
Some typical reasons why chargebacks occur are relate to operational issues or fraud, for example:
The purchaser may not be financially prepared for the additional activation costs incurred on the first bill so they will not pay the bill. This is an operational issue that can be addressed with additional training, so reps are explaining all of the first month’s charges to the customer before the contract is signed.
Employee fraud is another common cause of chargebacks. In a typical case, an employee buys discounted phones by activating extra lines on a customer’s account and then deactivates the lines after they have sold the phone on the black market for a profit.
Phones are also bought by agents of drug cartels and criminal organizations using fake social security numbers and stolen credit cards. These organizations never plan to pay the service fee and are selling these phones for significant profits on the international market.
Brad is responsible for helping Envysion’s wireless customers understand the best ways to use video based business intelligence to combat losses. In his time at Envysion he has dedicated himself to researching and consulting with wireless dealers to understand the drivers behind how they lose money. Brad’s background as a customer relations manager for Avnet and GE and a VP of Business development for several startup companies lends a unique perspective on how to manage customers and employees, so that the companies best interests are top of mind. Brad played varsity lacrosse and earned his Bachelors in Psychology from Bucknell University.