Back to Glossary

Fraud Risk Management

What Is Fraud Risk Management?

Fraud risk management in eCommerce entails employing methods and tools that detect risky or dubious transactions before they cause the business untenable losses. These tools and methods can also mitigate fraud cases in advance, even before they get on the store owner’s radar.

What Is eCommerce Fraud?

Also known as payment fraud, eCommerce fraud happens when a customer with bad intentions or driven by personal gains tries to deceive the eCommerce store when doing a transaction. Although fraud in eCommerce is prevalent with pseudo accounts, some fraudsters are bold enough to commit this heinous act behind their real accounts.

How Is eCommerce Fraud Detected?

eCommerce fraud management is critical if you’re going to realize profits and stay in business. Detecting fraud in your online store starts by screening all customers through the data you collect from them. With the user data at hand, you can flag suspicious customers before they log into your store or even access information that points to chargeback fraud risks.

Alternatively, you can use the data collected to create customer profiles. For instance, a customer’s email address can lead you to their social media profiles, where you can verify if the user really exists and is a real human. If not, you can block their profile from accessing your online store.

What Are The Effective Methods To Reduce The Risks In eCommerce Transactions?

The best eCommerce fraud solution is to prevent the risk’s prevalence before it actually happens. There are various ways of doing this, including:

  • Employee training and sensitization to ensure that they can implement policies and procedures;
  • Apply the Payment Card Industry’s Data Security Standard to shield your online store from data breaches;
  • Update shopping cart software to seal any loopholes that fraudsters might exploit;
  • Implement Address Verification, as well as Card Code Verification before processing payments;
  • Be vigilant enough to notice any suspicious user activity, such as a fake phone number.

What eCommerce Fraud Prevention Tools Should Merchants Deploy?

Businesses can leverage various online tools to prevent and mitigate eCommerce scams before they happen. That said, reliable eCommerce fraud prevention techniques include:

  • Implement Device Fingerprinting

This will help you flag suspicious users who recycle IP addresses and smartphone devices to target eCommerce stores with the intention of committing fraud.

Take advantage of a single data point to profile customers and flag fraudsters hiding behind pseudonyms and fake user profiles.

  • Social Media Lookup

You can do a reverse lookup of the user profile in question to determine whether they have valid social proof. Zero social media activity is a red flag.

Frequently Asked Questions About Fraud Risk Management

What kinds of fraud target eCommerce?

Now that you understand what is fraud risk management, what are the kinds of frauds that target eCommerce retail stores? They include:

  • Payment fraud;
  • Triangulation fraud;
  • Clean fraud;
  • Friendly fraud;
  • Affiliation fraud.

What are the 3 most common types of online frauds?

Three prevalent online frauds include:

  • Phishing – a cybercrime performed via email, text message, or phone call by attackers who are posing themselves as a reputable person or institution;
  • Malware attacks – a cyberattack performed by malicious software as an unauthorized action on the victim’s software;
  • Hijacking – when an attacker takes control of someone’s computer system, network, or software programs.

What is triangulation fraud?

This type of fraud occurs when the bad guys use a fake storefront, disguising themselves as middlemen to receive orders and money from unsuspecting customers.

What are future trends for online frauds?

Prevalent eCommerce fraud trends include:

  • Authorized push payments;
  • New account scams;
  • Coronavirus cybercrime;
  • Account takeover scam.

You May Find It Interesting

PIM Free Trial vs Freemium PIM vs Open Source PIM

PIM Free Trial vs Freemium PIM vs Open Source PIM

Explore the differences between free trial PIM systems, open source PIM, and freemium PIM solutionsm, their pros & cons.

Read more
PIM for Marketing: Full Guide [2024]

PIM for Marketing: Full Guide [2024]

PIM for marketing: unlock marketing success with PIM. Learn how to centralize product data for consistency and engagement.

Read more
Gepard Stiebel Collaboration
< 1 min read
Gepard Updates

Gepard PIM Embarks on a Groundbreaking Partnership with Stiebel Eltron

We are thrilled to announce a groundbreaking partnership between Gepard PIM and Stiebel Eltron, a leader in heating and energy solutions.

Read more
Gepard PIM Introduce New EPREL Product Categories
2 min read
Gepard Updates

New EPREL Product Categories at Gepard PIM

Gepard PIM is happy to announce the addition of new EPREL product categories: Air conditioners, Ventilation units, Temperature controls, etc.

Read more
EPREL Case Studies

Product Data Export To EPREL Database: 3 Success Stories

Product data entry to EPREL database: explore real cases and learn how Gepard helped comply with energy labeling regulations.

Read more
Gepard Features Hub: Digital Shelf Analytics For eCommerce

4 Key Performance Indicators in Digital Shelf Analytics Software

Explore essential digital shelf analytics KPIs such as search rankings, conversion rates, content quality, and pricing competitiveness.

Read more
EPREL Data Entry Service Providers

EPREL Data Entry Service Providers: What to Look For

EPREL data entry provider play a pivotal role in ensuring compliance, alleviating the burden of data management

Read more
Free PIM Audit Service
2 min read
Gepard Updates

Gepard PIM Launches Free PIM Audit Service

Our team understands the challenges businesses face in PIM, which is why we're thrilled to introduce our Free PIM Process Audit.

Read more
6 Key Tactics for Optimized EPREL Data Input

6 Key Tactics for Optimized EPREL Data Input

In this article, we delve into the role that EPREL data entry plays in securing adherence to regulations and accuracy in product data.

Read more
Top 5 Benefits of AI Mapping for Business

Top 5 Perks Of AI Mapping For Business

Discover how AI mapping can transform your business. Our article delves into the top five advantages of AI Mappings.

Read more

Let’s Get In Touch

Need to contact us? Just use this form

Gepard Privacy Policy