What should be included in a merchant's fraud prevention strategy?

Incorporating regular audits on transaction patterns into a merchant's fraud prevention strategy is essential because it allows for the identification of unusual or suspicious activities that could indicate fraudulent behavior. By systematically analyzing transaction data, merchants can detect anomalies such as sudden spikes in transaction volume, unusual geographic locations for purchases, or patterns that deviate from a customer’s historic behavior. This proactive approach enables merchants to adapt their strategies in real-time to mitigate potential fraud.

The other options do not provide an effective approach to fraud prevention. Automated chargebacks for all disputes might overwhelm the system and potentially alienate legitimate customers. Having a single payment method can limit customer choice and does not address the complexities of fraud prevention. Permanently suspending suspicious accounts without proper investigation may result in the loss of genuine customers and revenue. Regular audits, on the other hand, are a thoughtful and strategic way to manage and adapt to threats over time.