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.
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.
The best eCommerce fraud solution is to prevent the risk’s prevalence before it actually happens. There are various ways of doing this, including:
Businesses can leverage various online tools to prevent and mitigate eCommerce scams before they happen. That said, reliable eCommerce fraud prevention techniques include:
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.
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.
Now that you understand what is fraud risk management, what are the kinds of frauds that target eCommerce retail stores? They include:
Three prevalent online frauds include:
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.
Prevalent eCommerce fraud trends include:
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