Monday 20 October, 2014

Ecommerce Fraud – How to Prevent Fraudulent Orders

Ecommerce fraud is rare, but when it strikes, it can be deadly. No matter how big or small your ecommerce operations, you need to be proactive in protecting yourself against order fraud. Here are some tips and measures you can take to keep your online store safe.

The Warning Signs of Ecommerce Fraud

Here are some of the warning signs that could be telling you you’re a victim of ecommerce fraud:

* An unusually large number of orders, especially for the same item
* Orders to the same address but using multiple credit cards
* Multiple purchases by one person in a short period of time
* Free email addresses like Hotmail and Yahoo (these are easy to get without giving much personal information)
* Different “bill to” and “ship to” addresses, especially if they want expedited shipping.

There are also certain countries where a great deal of ecommerce fraud originates. They include Ghana, Nigeria, Uganda, Belarus, Estonia, Hungary, Latvia, Lithuania, Macedonia, Romania, Russia, Ukraine, Indonesia, Malaysia, Philippines and Thailand. If you don’t generally have customers in these countries but start seeing a large number of orders from one of them, this is a red flag.

Measures You Can Take to Prevent Fraud

Complete Credit Card Information. Get each customer’s complete credit card information, including exact name as it appears on the card, 16-digit number, expiration date and security code. Verify all credit card information when you carry out a transaction. You should also get their address and phone number.

Require Street Address. Require that each customer give you a street address. Don’t allow P.O. boxes, group homes, schools, hospitals, prisons or anything other than a person’s home.
Domestic Shipping Only. If you can without losing a great deal of your customer base, ship domestically only. This is much safer than shipping internationally. One reason is that international orders can’t be verified through the Address Verification System (AVS), a system that detects fraudulent addresses.

Confirm by Phone. This might be arduous if you take a large volume or orders, but one sure way to eliminate ecommerce fraud is to confirm every order by telephone. It’s a pain, but it’s nearly foolproof for eliminating fraud.

Keep Delivery Receipts. If you obtain and store all delivery receipts, you’ll cut down on the type of fraud where a customer claims to have never received a shipment.

It also helps a great deal to research the ecommerce platform you’re going to use. See what kinds of fraud protection measures they have. You can also research the platform by reading online reviews and forums where others have used the platform. Try to look for fraud cases and see how they were handled.

Fraud happens so don’t panic when it does. If you’re proactive about fraud prevention, you won’t see it often. If you’ve chosen a good ecommerce platform, you’ll be able to take care of it in case it does strike.

Bob Steele

Bob Steele

Bob Steele is an entrepreneur, software developer, marketer, and author living in the Denver metropolitan area. He’s an avid outdoorsman who loves skiing, hiking, fishing, boating, and just plain having fun. His interests include games, space, technology, physics, cooking (well eating actually), economics, business, internationalism, and team sports. With over thirty years of professional consulting experience, Bob has been exposed to many diverse business models and has gained a sensible approach to life. Bob’s company, WaveCentric is focused on commerce, marketing, and entertainment related products.

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