How to Spot Fraudulent Orders and Ways to Prevent It

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If you have been in the eCommerce business for quite some time, you have already experienced fraudulent transactions. In 2019, an average of $160,000 worth of fraudulent transactions were recorded every month from June to August.

This is why eCommerce fraud protection services are essential in this industry. You are more likely to spot some of these frauds if you take a closer look at each order. Always check if the following signs are present on a transaction.

Fraudulent transaction signs

First-time customers

Fraud buyers often target a few websites they have never used before. Once they have committed a fraud transaction at one, they will move at the next one to do the same.

Unusually large orders

Stolen credit or debit cards can be quickly turned down. This is why fraud buyers will try to max it out in one transaction.

Unusual location

Always check to double-check the location where the item is going to be shipped. If it is going to a country where you usually don’t get any orders from, chances are, it is a fraud.

Expedited shipping

A regular customer would prefer a less expensive shipping option. However, money is not an issue for fraud buyers. Take a closer look at customers who want to receive their order overnight.

Bulk order of a product

This is especially true if you have not received a bulk order in the past. If someone bought multiple items of the same product, the buyer is probably trying to max out a stolen card as fast as possible.

Multiple billing addresses

These orders indicate an explicit fraudulent transaction. The buyer likely used a batch of stolen credit cards, each with different names and billing addresses. However, the items are going to be shipped at the one shipping address.

Billing or shipping address does not match the IP address

Always check the IP address of your new customer. If it does not match the shipping or the billing address does not match with it, then there is a higher chance that it is a fraud.

Different cards are used from one IP address

If you have received multiple transactions going to different names and addresses but made in a single device, then those are more likely fraud transactions.

How to prevent fraudulent transactions?

Get a reliable third-party payment processor.

These companies make money if your business makes money. Hence, their goal is to make sure that all payments your store receives are secured. Moreover, most of these companies offer eCommerce fraud protection services.

Make sure that all your checkout pages are in “https.”

The encryption within HTTPS will keep your information confidential from fraudsters. Only your server and your browser can decode the traffic.

Make sure that your software and platforms are up-to-date.

Good platforms and software companies will keep their product up-to-date, keeping their product secured. This way, it will be hard for fraudsters to breach the security of your system.

Use CVV and AVS

Credit Code Verification or CVV is a security code that can be seen at the back of the credit card. By asking for CVV, the customer should have the physical card before they can make a purchase.

On the other hand, Address Verification Service or AVS will help you determine whether the billing address of the purchase and the credit card match.

By checking for signs and following these steps to avoid fraud, you will be confident that your eCommerce business is safe from fraudsters.