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6 Steps to detect fraud ecommerce transactions and orders

Did you know? There are billions of dollars fraud transactions every year in the ecommerce industry. Guess what, this figure is going to be worse in the coming years as there will be many more such fraud transactions.

ecommerce frauds

According to a research by Fintechnews , “The world had seen steadily increasing number of fraud globally as we embrace cashless payments. The world experienced card losses of $16.31 billion in 2014 and this is expected to grow to $35.5 billion in 2020.This figure includes ecommerce transactions too.”

Let’s learn how we can reduce (if can’t avoid completely) the number of order deliveries that are made through fraud transactions.

#1 Monitor each and every order

I’ve noticed several ecommerce websites that sends automated notification to their shipment department to deliver the products immediately upon successful charge of their customers credit card.

Its highly recommended that every online retailer must check each order generated through their ecommerce websites and if they find any order to be suspicious, they must investigate further into it.

#2 Using AVS

AVS” – which stands for “Address Verification Service” is a feature that’s provided by most of the payment gateways. Check with your gateway provider and get the appropriate settings done.

Usually these settings will be zip code match, billing address match, or no match. If it’s no matching, just a card number, expiration date, and CVV code will let the charge through. At least zip code matching should be enabled however in case of high number of frauds, both matches should be enabled.

#3 Check delivery/billing addresses

Checking each order’s delivery address can help you to identify fraud transactions up to some extend. For eg. if you think the delivery address looks strange for eg. a warehouse, you must further investigate to look into the order. Not necessary, it would be a fraud transaction order, but it never hurts to keep an eye on such orders.

You can also do some research on the billing address using Google search. The first step is to verify whether the billing address is valid or not and then you can also try to find out other activities done by this address (if possible).

#4 Call your customers

When you receive an order and you find that billing & delivery addresses are different (which is quite obvious in some cases like gifts, flowers etc.), you must take precaution and call both sender and receiver whether the information keyed-in are legit or not. Its also a great idea to ask your ecommerce designer to keep phone numbers (of both send and receive) as a mandatory field in your checkout process.

#5 Do a little research on email

You can also search on Google for the details like name, location, business, social accounts etc. associated with an email ID. A Google search can give you helpful insights on your customer’s demographic. Of course, you can’t expect Google results to show up required information every time you do research but you can definitely add this step in your checklist for verifying orders through fraud transactions.

#6 Order rush or overnight shipping

If you find that a customer is rushing you to deliver the order overnight, you must consider this sign as fishy.Especially the case when shipping to a different name and address than what is on the credit card.The fraudsters are afraid that the card owner must have complained to the concerned authorities and the ecommerce merchant can become aware of chargeback on this order.

If that’s the case, try calling customer and ask the reason of overnight delivery. To some of the readers here, it may sound weird that why should you call and ask your customer such a question. But the whole idea here is to understand and observe the customer intentions and if you find any such order as suspicious, ask customer to pay additional amount for express delivery.

I am sure following above checklist will definitely help you to reduce the number of order deliveries to the fraudsters.