5 ways to protect your fitness business from payment fraud
As a fitness business owner, it's important to remember that payment fraud is a real threat that can impact your bottom line and reputation.
As a fitness business owner, you play a crucial role in promoting health and wellness in your community. However, with the rise of online payments and virtual training, fitness businesses are increasingly becoming targets of payment fraud.
According to a 2018 report by The Association of Certified Fraud Examiners (ACFE), small businesses, including fitness businesses, are particularly vulnerable to payment fraud, with a frequency rate of 48%, compared to larger corporations.
This number is expected to rise in the coming years, highlighting the critical need for fitness business owners to stay informed and proactive in protecting their businesses from fraudulent activity.
Payment fraud can cause significant financial losses and disrupt your business operations, potentially damaging your reputation and losing clients' trust. Therefore, it's essential to take steps to protect your fitness business from payment fraud.
This article will provide an overview of the different types of payment fraud, best practices to protect your business, prevention tips for fitness business owners, and what to do if fraud occurs.
By following the information provided in this article, we hope you can help safeguard your business from payment fraud and protect your clients' sensitive information.
What is payment fraud?
Payment fraud occurs when a fraudulent transaction is made using a stolen credit card or other payment method. This can include card skimming, where the fraudster obtains credit card details using a skimming device, or cloning, where a counterfeit card is created using stolen card information.
Online payment fraud can also occur when fraudsters use stolen credit card details to make purchases online.
Another form of payment fraud is chargebacks and friendly fraud, where customers dispute legitimate transactions, claiming they did not authorise the payment or did not receive the product or service they paid for. This can result in chargebacks and fees for the business owner, as well as lost revenue.
Common types of payment fraud in the fitness industry
The fitness industry is not immune to payment fraud, and fitness businesses are increasingly becoming targets of fraudulent activity. Here are some common types of payment fraud that fitness business owners should be aware of:
- Card skimming and cloning: Fraudsters may target fitness centres that offer on-site purchases, such as merchandise or snacks. They may use skimming devices to obtain credit card details from customers and then use that information to create counterfeit cards or make fraudulent purchases.
- Online payment fraud: As fitness businesses increasingly offer online services, such as virtual classes and personalised training, they may become targets for online payment fraud. Fraudsters can use stolen credit card details to make purchases online or create fake accounts to purchase services.
- Chargebacks and friendly fraud: Fitness businesses may experience chargebacks and friendly fraud when customers dispute legitimate transactions, claiming they did not authorise the payment or did not receive the product or service they paid for. This can result in chargebacks and fees for the business owner, as well as lost revenue.
- Membership fraud: Fitness businesses may also experience membership fraud, where customers sign up for memberships using stolen credit card information or by providing false information.
- Gift card fraud: This occurs when a fraudster steals or copies the code on a gift card and uses it to make purchases. To prevent gift card fraud, fitness businesses should keep track of the gift cards sold and ensure that they are stored securely. It's also essential to educate employees on how to identify and prevent gift card fraud.
Best practices to protect your fitness business from payment fraud
As a fitness business owner, you have a responsibility to protect your business and your clients' sensitive information from payment fraud. Here are some best practices that you can implement to help safeguard your business from fraudulent activity:
1. Use secure payment processing
Choosing a secure payment gateway or processor is critical to protecting your business from scammers who may attempt to gain access to your sensitive financial information. Several reliable payment gateways provide in-built fraud detection and prevention features, such as PayPal, PayNow, and Stripe.
These payment gateways can help you prevent fraudulent transactions by using advanced online fraud detection mechanisms, such as AVS check, two-factor authentication, spending limits, and CVV. Make sure to utilise these tools and techniques whenever possible to prevent fraud and protect your business accounts.
In addition to using a secure payment gateway, it's important to ensure that your payment processing system is Payment Card Industry (PCI) compliant. PCI compliance standards are designed to ensure the secure handling of credit card information and prevent data breaches.
By choosing a PCI-compliant payment processing system, you can help protect your clients' sensitive information and avoid costly penalties or legal action.
Rezeve provides secure payment processing for its clients and uses reliable payment gateways such as Stripe and PayNow to ensure safe and secure transactions.
We are also planning to integrate with other payment gateways such as Xendit and RazerPay in the near future.
2. Educate your employees
It's important to regularly provide security awareness training to educate your staff about payment fraud and how to spot and handle suspicious orders or transactions.
Encourage them to always be vigilant, this includes recognizing signs of fraudulent activity, verifying customer information, and implementing best practices for securely handling credit card information.
Additionally, try to incorporate a few cybersecurity best practices at the workplace, such as:
- Using encrypted WiFi networks with firewalls when handling customers transactions and information.
- Exclusively communicating via company email IDs for business-related tasks.
- Using multi-factor authentication for all business email accounts.
- Sticking to safe password policies.
- Regularly backing up business and customer data.
By regularly training your employees on best practices for preventing payment fraud and incorporating cybersecurity measures, you can ensure that everyone in your business is aware of the importance of protecting sensitive information. This will also help create a culture of security awareness and reduce the risk of fraudulent activity.
3. Monitor transactions regularly
Keep an eye on your transactions regularly and flag any suspicious activity. Set up alerts for large or unusual transactions, and review your bank statements and financial reports regularly.
4. Keep software up-to-date
Ensure that your booking software and management systems, including your payment processing system, are up-to-date with the latest security patches and updates. This can help prevent vulnerabilities that fraudsters could exploit.
Rezeve is an all-in-one fitness management software that offers a wide range of features, including booking and scheduling, membership management, and payment processing. With Rezeve, you can manage all aspects of your fitness business from one centralised portal, eliminating the need to monitor separate software solutions to ensure they are up-to-date.
We take your business's security seriously and regularly update our software to prevent any vulnerabilities. By using Rezeve, you can have peace of mind knowing that you have the latest security features to protect your business from payment fraud.
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5. Store customer information securely
One of the most critical aspects of preventing payment fraud is storing customer information securely. As a fitness business owner, you have a responsibility to protect your clients' sensitive information from fraudulent activity. This includes personal information such as names, addresses, and credit card details.
With Rezeve, you can rest assured that your customer information is secure, and with our Staff Management feature you can control which staff members have access to customer data.
This allows you to assign your trusted staff to specific roles and manage who can supervise customer payments, view sensitive customer information, and perform other important functions.
What should you do if your business becomes a victim of payment fraud?
Despite taking all the necessary precautions, payment fraud can still occur. If you suspect that your fitness business has become a victim of payment fraud, here are some steps you can take to address the situation:
- Notify your payment processor: Contact your payment processor immediately and inform them of the fraudulent activity. They can help you investigate the issue and take necessary actions to prevent further fraudulent transactions.
- Notify your bank: Contact your bank and inform them of the fraudulent activity. They can freeze your account and prevent further unauthorised transactions.
- Be transparent with customers: If payment fraud has affected your customers, be transparent and communicate with them promptly. Notify them of the situation and what steps you are taking to address it. This will help to maintain customer trust and prevent further damage to your business reputation.
- Cooperate with authorities: If the fraud involves criminal activity, cooperate with law enforcement agencies investigating the fraud. Provide any information or evidence you have to assist with the investigation.
- Conduct an internal investigation: Investigate the situation internally to identify any vulnerabilities in your systems or procedures that may have contributed to the fraud. Take necessary steps to address these vulnerabilities and prevent future occurrences.
- Keep records: Keep records of all communication with your bank or payment processor, including the dates and times of the communication, the names of the individuals you spoke with, and the content of the conversation. These records will be helpful if you need to dispute any charges or provide evidence of fraud.
- Review and update your security measures: After experiencing payment fraud, review your security measures to identify any weaknesses or gaps. Update your security measures accordingly to prevent future fraudulent activity.
As a fitness business owner, it's important to remember that payment fraud is a real threat that can impact your bottom line and reputation. But don't worry! There are steps you can take to protect your business and clients from fraudulent activity.
If, unfortunately, fraudulent activity occurs, don't panic! Take immediate action by notifying your payment processor and bank, notifying your customers, reporting the fraud, and conducting an internal investigation. With swift action and diligence, you can limit the damage and prevent further fraudulent activity.
Remember, staying informed and taking necessary measures to safeguard your business from fraudulent activity can maintain the trust of your clients and protect your fitness business from payment fraud.
By following the best practices outlined in this article, you'll be well on your way to keeping your business and clients' sensitive information safe and secure.
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