Preventing E-Commerce Fraud

Fraud is an alarming threat that many e-commerce merchants will have to face during their careers. Unfortunately, “half of e-commerce businesses fall victim to… fraud, costing up to hundreds of thousands of dollars” according to Revision Legal. It can take weeks to months for victims to recognize and report false charges to their account meaning that, oftentimes, you may have already sent out shipments for the fraudulent sales. When the credit card company then reverses the charge, you’re the one who must incur the expenses of the lost merchandise.

Sound familiar? Here are some steps that you can take to safeguard your business against e-commerce fraud.

Obey PCI Standards

Any business who accepts credit cards are required to follow PCI compliance rules. If you don’t, you risk the possibility of lawsuits. Becoming PCI compliant is the biggest step you can take in defending against costly security breaches. PCI certification procedures vary based on the size of your business- you can learn more about PCI compliance here.

Require CVV Codes

A simple and effective security measure that you can take to prevent fraud within your business is requiring shoppers to enter their CVV codes at checkout. It is impossible to store CVV codes in online databases, so it is very likely that shoppers able to provide a CVV code are not fraudulent. As it is an important measure of security, customers will not mind the extra moment of time required during checkout.

Be Attentive to Red Flags

Carefully search your orders for common signs of fraud. Some red flags might include inconsistent billing and shipping information and high-risk IP addresses. If you aren’t sure about the validity of a specific order, don’t hesitate to reach out to the customer to verify their information.

It may help you to keep a record of previous fraud attempts. This way you can reference new high-risk orders as well as save detailed information to report to authorities if need be. Attentiveness can help to reduce your rate of fraud, but red flags aren’t always easy to spot.

Implement Preventative Tools

Spotting high-risk orders can be both difficult and time consuming. The Stone Edge Order Manager is software designed to help e-commerce businesses run smoothly. Its ample features include shipping and packing, inventory management, order processing, and other helpful tools. Stone Edge is partnered with MaxMind to offer you the best fraud prevention for your business. MaxMind automatically identifies risky orders and holds them for further review by detecting high risk IP addresses, email addresses, orders a certain distance from where the payment method was issued, and more. Using this information, the tool assigns a score from 0 to 100 to represent the probability that transaction is fraudulent. From there, the merchant is able to filter out orders over a certain fraud score.

To learn more about Stone Edge’s integration with MaxMind click here, or to learn more about the features of Stone Edge, visit our website here.

The possibility of fraud may be frightening, but rest assured knowing that there are steps you can take to help prevent it from harming your business.