Protect yourself from the eCommerce fraud using these strategies
Are you a retailer or manufacturer new to the ecommerce world or thinking of acquiring the multichannel approach? Then you should also be aware of the ecommerce scams and fraud that are becoming rampant. Sellers of the ecommerce websites at some of the other point have to deal with this issue. Online frauds are very different compared to what we usually see in brick-and-mortar businesses.
The biggest and foremost difference is that you cannot view your counterparty and the transactions they are doing while buying your product. This makes it very tough to verify the individual’s identity, who is purchasing your products.
In the ecommerce world, you need to take the required measures to protect your business from scamming and fraud. There are always unscrupulous people in the online world looking to get something for nothing. Hacking into different websites, using the wrong identity, other person’s card to make a purchase. Many more such innovative ideas are put by these deceitful people that might end up ripping your business and customers.
As a merchant, it’s your responsibility to educate yourself and take preventive measures to protect your ecommerce business. First, know how you can prevent eCommerce fraud or scam? Also, have the basic idea of common types of eCommerce fraud.
Common Ecommerce Fraud
As technology has developed so are the criminals. Before even thinking about securing your transactions and website, have detailed knowledge of the common ecommerce frauds:
Credit Card Refund Fraud: Fraudsters often do online product purchases using a credit card either by stealing or by gaining all the information electronically. The information might be gained through malware, phishing and data breach. The moment the transaction is done via credit card and the payment is approved; the business is entirely responsible because it has approved and ensured about the customer identity. At this, the card owner can ask for the reimbursement of the same paid amount from the company.
In another case, the fraudster can do the overpayment for the product purposefully. After that, he would call the business and inform them about the accidental overpayment and ask for a reimbursement. For the reimbursement of the excess amount, he would ask the business to refund the amount on some other alternative account claiming the credit card has been closed. Which means the business would pay not only the fraudster with the excess amount but will also be required to pay the customer with the entire amount.
Card Testing: In this type of fraud, the fraudster tests the validity of the credit card. He would test it by using it on different websites and as he gets the correct expiration date, he makes the purchase.
Friendly Fraud: This is also called as the chargeback fraud. This type of fraudulent activity happens when the fraudster purchases the product using his credit card and after receiving the item asks for a refund claiming his card was stolen.
Phishing: This type of fraud is common and many people are even aware of this type of fraud. The customer would send an email asking for user ID, password and credit card details. The sender would claim that he is from the credit card institution and wants some information due to the change in the internal system. Phishing allows the criminals to access the customer’s bank account and do purchase from your eCommerce store.
How do I protect my business from Ecommerce fraud?
For account fraud and identity theft, you should take the below necessary steps to keep your customer’s safe:
Ensure your Systems are PCI Complaint: The payment card industry provides clear guidelines for security and storage of payment card details. The best way to ensure that your store is following them is to either use a secured eCommerce platform or a third-party tool. The best examples are Magento, WooCommerce and KartzHub.
Address verification: Compulsorily ask the buyer to put the postal or zip code. Obviously, this won’t stop the fraudulent product purchase attempt. But it would somewhat protect you from a large portion of fraudulence.
Make entering of CVV code mandatory
Modern credit cards have a set of three numbers known as CVV code on their back. Make a standard practice of compulsorily entering the CVV number. This can eliminate much of the ecommerce fraudulent activities.
Track purchase history and customer behavior
If a Philadelphia-based consumer who buys face cleansers and beard oil, suddenly orders bulk women cosmetics that are to be delivered in Russia, then is it not suspicious? These are the possibilities when you need to keep a check on the customer.
Screen Suspicious Activity
There are various eCommerce platforms like KartzHub and fraud prevention apps that may provide automatic reports if:
- Multiple orders are placed from the same account using different credit cards.
- Multiple purchases from a single credit card and that too in a very short span of time.
- Phone numbers that don’t match billing address area code.
- Unusually very large orders.
- A sudden change to the customer’s shipping address.
Some of the apps that would keep you safe from eCommerce Fraud
Signifyd: The best application that offers chargeback protection for Shopify sellers. The app takes advantage of machine learning, domain expertise and big data to provide a 100% guarantee on every order against fraudulent chargebacks. Whenever a customer places an order, the Signifyd app automatically reviews the order and notifies you whether to ship it or not.
Subuno: The app is ideal for BigCommerce merchants. This app helps to reduce chargebacks and frauds, does automated reviewing and fraud detection, and allows the merchant or the seller to tailor the solution to existing fraud check processes and specific needs.
FraudLabs Pro: This app protects your businesses from the wrong people by screening all the order transactions for fraud patterns.
Simility: With the help of big data analytics, machine learning and data visualization capabilities, Simility helps the eCommerce sellers to prevent fraud in real-time. With this app, your business is protected against new account fraud, account takeover fraud, identity theft fraud, and wire fraud.
There are many such apps in the market Such as Riskified, Kount, DupZapper and so on, that can identify ecommerce frauds and notify you. With all the necessary information above you can easily protect your online business from unwanted scams and frauds. Start implementing the strategies and apps mentioned above for safe selling of products.