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5 eCommerce Fraud Prevention Tips To Protect Your Business

Fraud in eCommerce, also known as payment fraud or online fraud, is any false or illegal transaction. Check out these eCommerce fraud prevention tips.

eCommerce is without a doubt one of the most significant components and contributors to any online business. Additionally, the eCommerce business is evolving and growing every day, as well as the industry getting more influence and revenue growth.

Increasing revenue comes at a price, however, that is, more fraud on the internet. Online fraud is among the most troubling things facing eCommerce businesses today.

When you run an eCommerce business, it is essential that you understand what eCommerce Fraud Prevention is and take all the precautions necessary to avoid it.

5 Tips to Protect Your Business From eCommerce Fraud

eCommerce Fraud Prevention, like affiliate fraud, fraudulent credit card transactions, and other types of fraud, requires both identifying these frauds and taking preventive measures to avoid them in the future. In this way, you will be better prepared for the next eCommerce Fraud Prevention.

For both detection and prevention of fraud, there are several tools available. There are some that are technical, some that are not technical, and some that are software-based.

Let us look at how fraud can be identified before diving into tips for preventing it.

What are the signs of eCommerce fraud online?

What are the signs of eCommerce fraud online?

There are several ways to identify an eCommerce Fraud Prevention online. The type of eCommerce fraud, however, depends on the ingenuity and skills of the fraudsters. By increasing your defenses against these frauds, fraudsters are also upping their game and devising new ways of defrauding the targets. Thus, it is essential that you keep updating and upgrading the features of your online store.

There are a few common red flags to look out for:

  • An inconsistent order history

There may be inconsistencies in the information entered by the customers, such as city and zip code that don’t match, or email address and IP address that don’t match.

  • Locations that seem unusual

Customers may make purchases from an uncommon region when they usually purchase from a certain region.

  • Larger orders than usual

show this when the customer places a larger order than usual. Furthermore, you may also find several units of the same SKU in one order and expedited shipping. An order may be placed by a fraudster who doesn’t want to get caught.

  • Having multiple shipping addresses

Orders are placed under one billing address, but products are shipped to different shipping addresses.

  • There are several transactions within a short timeframe.

The customer may place several orders at the same time.

  • A new country may place multiple orders at the same time.

This may happen when most of your customers are from a certain country or region. Within a few weeks, you suddenly receive several orders from a new country.

  • A number of credit cards are used to place the orders.

Within a certain period of time, the customer places multiple orders using different credit cards.

  • Repeatedly declined transactions

During multiple transactions, the customer fails to enter one or more details from the credit or debit card correctly, resulting in declined transactions.

This article provides five tips for eCommerce Fraud Prevention.

1. Maintain a regular security audit of your site

Maintain a regular security audit of your site

By conducting regular audits of your website, you can discover security flaws that could lead to eCommerce Fraud Prevention. The flaws would have been discovered before fraudsters and criminals could exploit them. Here are some questions to ask yourself during a security audit:

  • Does the shopping cart software and plugins have the latest version?
  • Has the SSL certificate been updated and is it working?
  • Is the store compliant with PCI-DSS (Payment Card Industry Data Security Standard)?
  • Are the website information and data backed up adequately?
  • Does the website undergo regular malware scanning?
  • Strong passwords are used for admin accounts, databases, hosting dashboards, CMS, and FTP access?
  • Passwords are changed regularly?
  • How is communication between the store, customers, and suppliers encrypted?
  • How often are the inactive plugins checked and removed?

2. Maintaining compliance with PCI-DSS

Maintaining compliance with PCI-DSS

A website that accepts online payments using credit cards, debit cards, or even UPI payments must be PCI compliant.

A PCI refers to the Payment Card Industry, which is developed and managed by the PCI Security Standards Council. Compliance with PCI standards guarantees the security of credit card payments. Therefore, your customers can safely use their credit cards if your website is PCI compliant.

In addition, if you run an eCommerce store on a SaaS-based platform, the platform will typically support PCI compliance.

3. Make sure you verify your address.

Make sure you verify your address.

In real-time, Address Verification Service identifies suspicious credit card transactions and prevents frauds such as credit card fraud. A credit card processor or issuing bank will usually offer an address verification service. However, you should always check to prevent fraudulent activity.

Address Verification Service works in this way. The address provided by the customer is compared against the address provided by the issuing bank in the card holder’s documents. Checks are performed when a merchant’s request is sent to a payment processor for authorization of credit card transactions. The transaction is either declined or flagged for further investigation if the addresses don’t match!

All sizes of businesses can benefit from using the Address Verification Service. As a startup business, integrating the service on your website can be a great way to prevent credit card fraud.

4. Checking the website regularly for suspicious activities.

Checking the website regularly for suspicious activities.

Shoplifters are usually caught by fraud prevention officers at brick-and-mortar stores. To prevent fraudulent transactions, you can monitor your online store for suspicious activity. Monitoring your online store involves looking for red flags by keeping an eye on shipping information, inconsistent billing, and the physical location of customers.

You can use tools that track IP addresses to keep an eye on where your customers are physically located. When a user is from a region or location that is known to be a fraud base, you’ll receive an alert. A customer belonging to a certain region or location may not be a fraudster, but you can still run a background check. When the customer visits your online store, you can act if you discover something suspicious.

5. Establishing an anti-fraud policy.

Establishing an anti-fraud policy.

There are multiple software solutions available on the Internet that can help you detect and prevent online fraud. The solutions come with varying features and prices. Therefore, you can choose one that fits your needs and budget the best!

Additionally, the tools you choose for your online store may differ in terms of their installation and management processes. Business owners usually prefer hands-on solutions, but there are a few owners who leave the installation to experts.

While selecting an anti-fraud tool for your online store, consider the following three types:

Basic anti-fraud tools

The goal of this type of fraud-fighting tool is to prevent only one kind of fraud. This tool is often integrated into online shopping carts and eCommerce platforms. Using machine learning algorithms, rudimentary anti-fraud tools validate email addresses, identify fraudsters using IP geolocation, perform device fingerprinting, and verify addresses.

Mid-level antifraud solutions do all these things.

Anti-fraud tools offer several functions, such as auto declining of risky orders, chargeback guarantees, protection against new account fraud, and protection against account takeover.

The best anti-fraud tools provide all these features.

Only top-tier anti-fraud tools provide these features. Moreover, you also get other features such as outsourced case management, loyalty fraud management, manual review of suspicious transactions, automatic decisions, policy abuse protection, and expertise working with large merchants. With such a wide range of anti-fraud features, you can effectively prevent online fraud.

A fraud management system, also known as an eCommerce Fraud Prevention system, can even help you reduce eCommerce Fraud Prevention in your online store.

Final Thoughts

ECommerce is one of the fastest-growing industries worldwide. This is, unfortunately, leading to an increase in eCommerce fraud. A fraudster’s plan of attack on an online merchant is always well-planned and well-rehearsed. Additionally, merchants are learning how to detect and deter these online frauds.

You should protect your eCommerce website from eCommerce Fraud Prevention if you are an online merchant. In order to do so, you must first understand what eCommerce Fraud Prevention is. After that, you can look for tools to help you detect and deter fraud. A software solution that you integrate well in advance in your website could even prevent these frauds from happening in the first place!

Please let us know what you thought of this article in the comments section below. If you experienced an eCommerce Fraud Prevention in your online store and how you detected and prevented it, we’d love to hear about it!

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