Online purchase fraud is one of the biggest concerns in eCommerce, for both buyers and sellers, since it creates distrust among the former and major problems for the latter.
Many online sellers believe that credit card fraud can be a serious risk to their businesses.
One of the main ways this type of fraud is committed is through stolen or cloned credit card information, used to make online purchases not authorized by the legitimate cardholder.
Image source: http://www.hudsonhorizons.com/
No one is immune to this problem. Sooner or later, our online store may fall victim to fraud. One day we receive a credit card purchase and, after we’ve already shipped the goods, we’re told there’s a problem with the transaction. In a situation like this, we’re very likely to lose both the products and the money.
To prevent or try to minimize the impact of potential fraud, the online store needs to take every possible precaution. Solid development to avoid security issues, an SSL certificate for data transmission on the site, and a secure payment gateway that also stores credit card information… can all help us build a more secure system. But that alone isn’t enough, since fraudsters are often one step ahead of the technology.
Thoroughly checking the orders we receive will also go a long way toward preventing fraud. There are usually many signs that a transaction may be fraudulent. There’s no need to get obsessed, since many of them may not be, but it’s better to be cautious to avoid unpleasant surprises.
Among others, the following signs may make us suspect that we’ve received a fraudulent order:
- An order worth far more than the usual average
- Several consecutive purchases by the same user
- Several orders from the same IP with different delivery addresses
- Several payment attempts at the POS before a successful order
- A transaction IP that locates the order in a different country from the delivery country
- Missing information or strange or inconclusive contact details
What can I do if I suspect a fraudulent transaction in my online store?
- First and foremost, DO NOT SHIP THE GOODS under any circumstances until you’re sure the transaction is genuine. Even if this goes against your shipping policy by delaying delivery, as I said earlier, it’s better to be safe than sorry.
- Check the transaction with the bank so they can tell you whether there are signs of possible fraud, and share your suspicions and concerns with them.
- Contacting the user to verify the order is usually a good option—ask them to confirm delivery details and other information. It’s important to keep a record of all communications with the customer; if they’re by phone, it’s advisable to send a confirmation email as well.
- If the buyer doesn’t respond, or their response makes it clear it’s fraud, report it to the bank and the police with as much information as possible (user details, bank details, transaction IP address, emails or communications exchanged, etc.).
It’s very important to keep all these fraudulent transactions well documented and, above all, not to use the money from them, since the courts may later require us to return it to its rightful owner. If we chose to take advantage of or ignore repeated fraudulent transactions in our online store simply for the profit they bring, we could be committing the offense of concealment or complicity with those responsible for the fraud.
This is a very serious issue, and it’s everyone’s responsibility to do their utmost to stamp it out, since it can be a major brake on eCommerce growth and, above all, on users’ trust in online shopping.
