Enforcing ethical behavior in retail

Globally, over 10 million people are affected by credit card theft every year, estimates the Federal Trade Commission. Increasing instances of skimming (where the card reader can be modified to store information for later use) and online black marketing of credit card databases imply that India is facing a rising threat as fraud is driven by neglect – both by card owners and retail houses. Credit card fraud can affect both online and off line transactions. Sixty percent of online card fraud occurs only while buying an air ticket according to experts.

In just a swipe of your credit card, the retailer (a restaurant, a mall, a, coffee shop) obtains information on Track 1 and 2 data. Track 1 data from the magnetic strips gives the card account number and the three digit card verification value (CVV). This data per se can be misused. Cardholders must ensure that they do not lose sight of their card and observe if the swipe action is repeated, experts advice.

Merchants must also buy the right retail automation software to ensure he stored information is not misused. Software used to store information should be certified with Payment Application Best practices, which specifies what information is private and what may be stored. Such credit card information usually resides in more than one location – the computer, servers and the storage. Retailers should be worried about the risk of multiple storage of client’s information.

The sub- continent is lagging in the adoption of the global industry standard PCI DSS –Payment Card Industry Data Security standard, which is backed by Visa, Master card, American Express and Discover. In the US, 35 per cent of Level 1 merchant (top ones) are complaints with PCI DSS. About 30 per cent of their European counterparts are compliant.

By end 2008 SISA expect India’s 50 large merchants to be compliant with international guidelines and security standards. Banks and financial services organizations are upgrading security at their data centers in line with this changing scene. It is their best interest to save their users identity and credit card information. Utility providers such as phone, water and electricity services will adopt more stringent security while dealing with transactions. Protecting consumer information will become a priority for the government to consumer (G2C).

On the other hand, E-bay had announced some of the most stringent measures in its 12 years history to target unreliable and fraudulent sellers, marking hat executives of the world’s biggest e-commerce company concede will be a controversial bid to receive slowing growth.

The changes are part of a broader overhaul and E-bay executives are braced for wave of dissatisfaction among some users the changes take effect. Some sellers will in effect, become invisible as their goods are buried at the bottom of search results when users hunt for things to buy.

E-bay last year, adjusted its five star ranking system one of the internet’s first and most successful attempts to harness user feedback, to try to weed out unreliable sellers and now rates the on more detailed criteria such as whether they ship on time.

In future sellers whose overall ratings fall below 4.2 on the five point scale, will find their goods fall to the bottom then buyers do product searches the group said. Weaker sellers will; also be forced to use a guaranteed payment system, such as E-bay’s Pay Pal.

E-bay has also made an attempt to attract back its most active users, known as power sellers who have long been the lifeblood of its market but who have been defecting in increasing numbers to websites such as Amazon.com.

In future power sellers will receive free discounts of up to 15 per cent on their user satisfaction degree reaches certain level, and their goods feature at the top of search results.

E-bay also said it would cut the fees it charged users to list goods, in an attempt to bring more goods back to its market, while increasing the final value fees sellers pay when a sale actually takes place.

To prevent the market being flooded something that happened when E-bay changed its fee structured two years ago – the company said it would use its search engine to ensure that only the most relevant products are presented to buyers.