Dutchie Pay by Bank includes multiple layers of fraud prevention designed to protect your dispensary, your customers, and Dutchie. These safeguards work together behind the scenes to reduce financial risk while still providing a fast and convenient checkout experience.
This article provides a high-level overview of the fraud protection measures in place and what dispensary teams should know when questions arise.
How fraud prevention works in Pay by Bank
Pay by Bank uses a combination of automated monitoring, behavioral analysis, and transaction limits to identify and prevent potentially fraudulent activity. These systems continuously evaluate transaction activity and adapt over time based on usage patterns and risk signals.
Fraud protections are intentionally layered so that if one safeguard is bypassed, additional controls are in place to prevent financial harm.
Velocity limits
One of the primary fraud prevention tools used in Pay by Bank is velocity limits.
Velocity limits evaluate the speed, frequency, and dollar amount of transactions within defined time periods. These checks help identify behavior that may indicate fraud, such as:
- Unusually large purchases compared to past spending
- Multiple transactions or attempts in a short timeframe
- Rapid changes in spending behavior
Velocity limits are not intended to block legitimate customers. However, because they are designed to stop fraud before it occurs, well-intentioned customers may occasionally encounter a velocity-related decline.
Velocity limits are applied across multiple areas, including:
- The customer’s account and transaction history
- The linked bank account’s usage patterns
- The retail location’s expected transaction volume
These limits automatically adjust over time based on usage and payment behavior. For more information about velocity limits visit this help center article.
Account and identity protections
Pay by Bank includes additional protections that help verify account ownership and detect suspicious behavior. These protections may evaluate:
- Whether a bank account appears to be used consistently and as expected
- Changes in account behavior that could indicate unauthorized access
- Signals associated with elevated fraud risk
If suspicious activity is detected, transactions may be declined or accounts temporarily restricted to prevent potential losses.
Transaction monitoring and risk analysis
Transactions are continuously monitored using risk analysis tools that assess multiple data points in real time. This allows Pay by Bank to:
- Identify patterns commonly associated with fraud
- Reduce the likelihood of returned or disputed transactions
- Protect both consumers and dispensaries from unauthorized activity
These systems are designed to improve over time as more transaction data becomes available.
What dispensary teams may see at checkout
When a fraud prevention measure is triggered, budtenders may see a general decline message in the POS, such as:
Your Pay by Bank transaction has been declined. Please try again later.
For security and privacy reasons, detailed decline information is not displayed at the POS. This helps protect customer data and prevents bad actors from learning how fraud protections are structured.
How to support customers
If a customer encounters a Pay by Bank decline related to fraud prevention:
- Reassure them that these protections are in place to keep their account and funds secure
- Let them know the decline does not necessarily indicate wrongdoing
Why fraud prevention matters
Fraud prevention measures help:
- Reduce financial losses for dispensaries
- Protect customers from unauthorized bank activity
- Maintain the long-term reliability of Pay by Bank
By using layered protections like velocity limits and transaction monitoring, Pay by Bank helps create a safer payment experience for everyone involved.
How dispensaries can enhance fraud prevention at the store level
While Dutchie Pay by Bank includes multiple built-in fraud protections, dispensaries also play an important role in reducing fraud risk at the store level. The following best practices help protect Pay by Bank transactions as well as other order types.
Always check IDs at checkout
While many dispensaries already scan IDs to verify legal age, it is equally important for budtenders to confirm the identity of the person picking up the order.
Pay by Bank orders can be placed online, in-store, or at kiosks. Your team should confirm that the identifying information on the ID matches the information associated with the order.
Best practices include confirming:
- Full name
- Date of birth
This information should match the customer’s POS profile. When possible, it is also recommended to confirm that the phone number and email address on the POS profile align with the Pay by Bank profile.
See something, say something
If a customer interaction related to Pay by Bank seems suspicious:
- Document details about the interaction
- Notify store management
- Follow your internal safety and escalation procedures
Notes can be added to the customer profile in the POS using the customer notes or journal feature.
When documenting a potential issue, capture as much detail as possible, including:
- Order number (even if the order is canceled)
- Transaction or attempted transaction date
- Order type (ecommerce, kiosk, or in-store)
- Contact information provided by the individual attempting pickup or payment
Reports of potential or suspected Pay by Bank fraud can be directed to Dutchie Support. These reports are reviewed and escalated internally for further investigation when appropriate.
If a customer contacts your store with a fraud concern related to Pay by Bank, provide them with Dutchie Support contact information and ask them to reach out directly. Some investigations require private information that cannot be handled at the store level.
Use your relationship skills
Budtenders know their customers best. Keeping thoughtful notes on repeat customers—such as typical order size, favorite brands, or preferred product categories—can help your team recognize when something feels out of the ordinary.
Examples of situations that may warrant a closer look include:
- A regular customer suddenly placing multiple online orders that differ significantly from their usual purchases
- An order total that is much higher than a customer’s typical spending
- A new customer using the same name, email, or phone number as a known regular customer
- Someone claiming to pick up an order on behalf of another customer without documentation showing they are authorized
Trusting these signals can help your team start the right conversations and escalate concerns early.
Proactive vs. reactive fraud prevention
Encourage your team to take a proactive approach to fraud prevention:
- Stay focused during checkout
- Pay close attention to unusual behavior or order patterns
- Speak up when something does not feel right
For urgent concerns or when you need an expert review of a questionable transaction or interaction, contact Dutchie Support. It is always better to raise a concern early than to address an issue after fraud has occurred.
Key takeaways
- Fraud prevention is most effective when technology and in-store awareness work together
- Identity verification at checkout is critical for Pay by Bank orders
- Clear documentation helps support investigations
- When in doubt, involve management or Dutchie Support