Ecommerce fraud is a big problem for small businesses. Return fraud, in particular, can be devastating to a small business’s bottom line. Fortunately, there are some things that small businesses can do to prevent return fraud. By being aware of the problem and taking some simple precautions, small businesses can protect themselves from return fraud.
Ecommerce Fraud Prevention Tips
Organizations must understand how to reduce risk, especially during the Christmas season. With this advice from Sift Science, you may learn some of the crucial procedures for safeguarding your company.
Learn How Fraud Is Committed
Fraud is a serious problem that affects businesses and individuals alike. There are many different ways that fraud can be committed, and it is important to be aware of these so that you can protect yourself and your business. Here are some of the most common ways that fraud is committed:
- Identity theft is one of the most common types of fraud. This occurs when someone steals your personal information, such as your Social Security number or credit card number, to open new accounts or make purchases in your name.
- Phishing is another common type of fraud. This occurs when someone sends you an email or text message pretending to be from a legitimate company in an attempt to get you to share personal information, such as your bank account number or password.
- Fraudulent charges on your credit card are also relatively common.
Look for Behavioral Anomalies
Fraud in ecommerce is a huge problem. In 2018, ecommerce fraud was responsible for $19.4 billion in losses worldwide. That’s a lot of money! And it’s only going to get worse as ecommerce grows.
So what can you do to protect your business? One of the best things you can do is to look for behavioral anomalies. By analyzing customer behavior, you can spot potential fraudsters and take steps to prevent them from stealing from you.
There are a few things to look for when you’re trying to spot behavioral anomalies:
- Sudden changes in behavior: If a customer who normally buys small items suddenly starts buying high-priced items, that could be a sign that they’re using stolen credit cards.
Use a Fraud Prevention System
Ecommerce fraud is a growing problem for online businesses. A fraud prevention system can help protect your business from fraudulent orders and chargebacks.
There are a few things to consider when choosing a fraud prevention system for your ecommerce business. First, you need to decide what type of system you need. There are two main types of fraud prevention systems: order screening and chargeback management.
Order screening systems check incoming orders for red flags that may indicate fraud. Chargeback management systems help you dispute chargebacks and prevent them from happening in the first place.
Which type of system you need will depend on your business’s specific needs. Order screening may be sufficient for businesses with a low volume of orders, while businesses that experience a high volume of chargebacks may need a more comprehensive solution that includes both order screening and chargeback management.
Verify Some Cases Manually
As ecommerce businesses grow, so does the risk of fraud. Chargebacks can be costly and time-consuming to resolve, so it’s important to take steps to prevent them from happening in the first place. One way to do this is to manually verify some cases before approving them.
This may seem like a lot of work, but it’s worth it to avoid the hassle of chargebacks later on. To manually verify a case, you’ll need to look at the customer’s purchase history, shipping address, and other factors. If something doesn’t add up, you can reach out to the customer directly to get more information.
Manually verifying cases may take a bit of time upfront, but it can save you a lot of headaches down the road.
Don’t Turn Away Actual Customers
Ecommerce fraud is a big problem for online businesses. They lose money from chargebacks, refunds, and fraudulent orders. But what’s even worse is when they turn away actual customers because they’re afraid of fraud.
There are a few things you can do to make sure you don’t turn away actual customers. First, don’t require too much information from them. The more fields they have to fill out, the more likely they are to abandon their purchase. Second, use a good fraud detection system. There are a lot of great options out there that can help you weed out the bad apples. Finally, don’t be afraid to give your customers a little leeway. If something doesn’t seem quite right, but you’re not sure, err on the side of caution and let them through.
Turning away actual customers is bad for business.
