6 Most Effective Ecommerce Fraud Prevention Techniques
Online fraud prevention tools are one of the most important aspects of any online business. Protecting your customers from illegitimate transactions is imperative to keeping them coming back for more.
Fraudulent transactions not only cost you money but also make it difficult for you to grow your customer base and can cause a significant blow in customer loyalty.
Thankfully there are many different ways to protect yourself against these types of fraudulent transactions. Below are ecommerce fraud prevention techniques that will help in giving protection against fraudsters.
1. SSL Certification.
SSL certification is a type of online safety tool that is used to prevent fraud. The main use for this certificate is to protect the identity information about the website visitor – such as their name, credit card number, or other personal details – from being intercepted by cyber thieves who want to steal the information to commit fraud.
SSL certification can be easily integrated with an e-commerce store using tools provided by most payment gateways. Once installed on a web server, it provides two key functions: encrypting sensitive data transmitted across public networks (such as payments) and ensuring site visitors arrive at the intended destination through user authentication methods like passwords and digital IDs.
Online retailers should install an SSL certificate on all sites that accept credit cards or perform other financial transactions, including sites that sell goods on behalf of clients. SSL certificates are also good for protecting business-to-business web portals and e-commerce drop shipping websites.
2. Using a complex password for all accounts.
Fraudsters and hackers are always trying to find a way into people’s accounts. One of the best ways to prevent this is by having strong passwords for all of your online accounts.
Making sure that every password has at least one capital letter, one number, and one symbol will go a long way towards protecting you from being hacked or defrauded. Using different cases and symbols makes it hard for hackers/fraudsters to guess.
This is just one way to help protect yourself and your valuable information online that you need to use every day. Including passwords that are hard to guess can be a great way of protecting your online accounts from fraudsters and hackers.
3. Implementing a chargeback policy.
A chargeback policy is one of the strongest tools that a merchant has in online fraud prevention. The process helps merchants recover a great deal of money from fraudulent transactions, and it also provides the opportunity to build trust with consumers.
The chargeback procedure is initiated when a consumer contacts their bank or credit card issuer claiming that they did not authorize the purchase made on your website.
If you have implemented effective policies for verifying purchases (such as requiring an authorization code), then there are very few cases where this happens legitimately ─ but once your business experiences one chargeback, more will follow!
Merchants who implement strong measures against e-commerce fraud can expect high levels of turnover due to a minimal number of false claims by customers trying to get out of paying for products or services rendered.
One of the best policies for preventing online fraud is to take all reasonable steps to ensure that your customers are who they claim to be. An excellent way of doing this is by requiring some form of customer authentication before allowing them access to their account or performing any transactions.
Another great step you can take when implementing a chargeback policy is making sure you only ship products after receiving payment and sending items through certified mail with signature required so there’s proof it was sent out if an item goes missing in transit. This will help prevent fraudulent complaints about not receiving goods because the bank knows exactly where the package went!
4. Performing regular order verification checks.
Performing regular order verification checks is a great online fraud prevention tool. Verification can be done either by the merchant or by an external company, but it should always include some verification of identity and address to minimize risk.
Merchants are urged to request proof of identification when orders come in from new customers who have never placed an order before, especially if they live outside the country where their business operates.
Address confirmation should also be performed on every single transaction—and even more important for international transactions than domestic ones—to ensure that you’re not sending boxes out into the world without knowing where they’ll end up because this will result in high rates of loss due to undeliverable packages.
5. Monitor your customers’ transactions for suspicious activity.
Monitoring your customers’ transactions can help you detect potential online fraud. You want to be able to identify suspicious activity quickly so that you are not liable for any loss the customer incurs as a result of this fraudulent transaction.
There are many ways in which you can monitor your customers’ transactions, both on and offline. Depending on how often they make purchases from you, setting up an automated email notification system may also be appropriate if their account is accessed or there is unusual money movement into or out of the account. This will help you to identify any suspicious activity in your customer’s accounts.
6. Encrypt sensitive data in transit and at rest.
Encrypting sensitive data in transit and at rest is a good way to protect your online business, but it’s also not enough on its own. You should focus on encrypting sensitive data throughout the entire process: when you’re creating it, transferring it between systems, and storing it.
This approach of using encryption for all kinds of sensitive information such as customer records or financial transactions will help prevent hackers from gaining access to your system if they break into one part of the network.
With the rise of e-commerce, online fraud prevention tools are an important part of any website. Online fraud is a major problem that costs businesses billions every year and can lead to years of recovery time for those who have been victimized. Moreover, the time and effort involved in recovering from online fraud can cost the company more money.