Amazon is Prime for Fraud

March 27, 2018 | Article

For small businesses, Amazon Prime is a no-brainer. Shipping costs are included in the membership and products arrive in two days. This allows organizations to purchase products quickly and easily.

Search. Select items and checkout. Soon your package arrives.

This simple process is also how easy it can be for employees to steal from organizations through online vendors like Amazon.

Continuing with the Amazon example, once a profile is setup and linked to your email, you can add multiple delivery addresses and credit cards, including business credit cards. You can set any credit card as the “default” card for payment which allows you to purchase online or with the app. Since it only requires a couple of clicks, over-purchasing and making purchases unrelated to the business is far too common.

Some business owners review company credit card statements as an internal control measure. However, charges to Amazon may appear to fit within their purchasing policies, allowing fraud to go undetected. Receipts are often not printed and included with statements since many organizations are “going green” or employees simply do not include them.

If employees use a personal Amazon account, business owners cannot easily access their information to review their purchases, whether part of regular review procedures or as part of a response to red flags. However, if organizations require employees to use a “company” Amazon account, then the review process is a breeze. You can export a spreadsheet of the transaction details, including information such as which credit card was used, where it was shipped, who ordered it, the cost and item descriptions directly from Amazon.

If you decide to go with the no-brainer, here are three keys to reducing fraud within your organization:

  1. Require business accounts (whether Amazon or another vendor) that you can access.
  2. Review transactions exports and other purchase information the vendor provides online.
  3. Reconcile the transactions to what was purchased on the company credit card.
3 Keys to Reducing Fraud

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