Most business owners are aware of the many risks associated with e-commerce transactions. However, even the most vigilant business owners can fall victim to fraudsters looking to exploit vulnerabilities in online systems. In this blog post, we will outline 6 signs that indicate your e-commerce transaction may be fraudulent. Armed with this information, you can better protect your business from becoming a victim of ecommerce fraud.
1. Unusual or High-Value Orders
One of the first signs of ecommerce fraud is an unusually high-value order. While there is no set threshold for what constitutes an unusual order, it is important to be aware of large orders that are out of the norm for your business. If you receive an order that is significantly higher in value than your average order, it may be worth investigating further to ensure that it is not fraudulent.
2. Customer Requests Rush Shipping
If a customer pays more for expedited shipping on an order, it may be a sign of fraud. This is because criminals will often use rush shipping to decrease the chances that a merchant will manually review the order. Individuals who commit fraud understand that stolen cards have short lifespans, so they’re more willing to pay for faster, more expensive shipping. To avoid this type of fraud, verify the billing and shipping addresses before shipping an order.
3. Billing and Shipping Address Don’t Match
Another sign that an ecommerce order may be fraudulent is when the billing and shipping address do not match. While the customer may just be ordering a gift and shipping it to someone else, this could also mean that the customer is using a stolen credit card or that they are trying to hide their identity by using a false address. In these situations, if you suspect fraud, it’s recommended that you reach out or email the customer to confirm the order and their identity. If you are unable to verify the customer’s information or they don’t respond, it may be best to cancel the order or keep it on hold until verification is received.
4. Customer ships products to unusual locations
Ecommerce fraudsters often target businesses that ship internationally. This is because it can be more difficult to track down and prosecute criminals in other countries. If you receive an order from an unusual location, it is important to take extra steps to verify the customer’s information before shipping the order.
5. No Phone Number Provided
When placing an online order, most customers will provide a phone number so that they can be contacted if there are any problems with their order. If you receive an order without a phone number, this could be cause for concern as it will make it more difficult to contact the customer if there are any issues with the order.
6. Customers place multiple orders in quick succession
If ecommerce merchants notice customers placing multiple orders in rapid succession, it could be a sign of card testing – and that’s a dangerous form of credit card fraud. Bad actors use this technique to validate stolen credit cards; it often involves purchasing low-dollar-value items in bulk from ecommerce stores. The bad actor then uses these confirmed card numbers to make larger fraudulent purchases, resulting in ecommerce fraud and identity theft. It’s important for ecommerce businesses to recognize this type of transaction so that they can take steps to implement credit card fraud detection measures such as automatic screening, sophisticated algorithms, and real-time alerts which notify merchants when unusual transactions occur. That way, ecommerce businesses can halt any potential fraudulent transactions before they become a problem.
Now that you’re armed with these six signs of ecommerce fraud, you can take steps to protect your online business from nefarious actors. By keeping an eye out for these red flags, you can help ensure that your business doesn’t become a victim of fraud. If you’re ready to take your ecommerce website to the next level, I can help. I love partnering with established businesses to help create stellar online presences that help drive sales while maintaining necessary protections against fraud. Reach out today to get started!
