Protecting Your Online Business from Ecommerce Fraud
More people are discovering how viable an online business can be and how it helps them have an additional income or even turn it into their primary source of income. As such, the online marketplace is getting crowded. The situation also means that cybercriminals have new targets for their unscrupulous deeds.
Becoming a victim of an ecommerce scam costs more than the value of your transactions. You will have to spend more on merchandise loss, fees, interest, and miscellaneous expenses. Moreover, getting victimized leads to loss of customers, reputation and damage to your business. If you want to prevent online retail fraud, it is best to understand them and use an ecommerce fraud management solution to be ready for any eventuality.
What is ecommerce fraud?
Ecommerce fraud is any fake or illegal transaction made on an online shop, usually using stolen or forged billing information. Some examples of ecommerce fraud include stolen ATMs, credit cards, and identity theft.
Common types of ecommerce fraud
Cybercriminals use different methods to commit online fraud, and here are the ones they commonly use.
- Card cracking. The thief steals the ATM or credit card information and tries to use it to buy various items. Initially, they will make small purchases to test the card’s limit and increase their purchases later.
- Chargebacks. With a chargeback, the customer contacts the credit card company to reverse the charges made on the card. The criminal may use an online store that accepts credit card payments. They will wait until they receive the merchandise before calling the credit company and request a chargeback. Not all chargebacks are fake. Legitimate customers may request a chargeback when they did not receive the product they ordered, but sometimes the online stores refuse to fix things. However, some people use this method to accumulate free items.
- Account acquisition. This type of retail fraud is one of the most effective forms of ecommerce fraud because of poor account management security. In this method, the criminal gains access by impersonating the owner by hacking passwords and logins. Once they gain entry, they purchase goods from other sites, steal money from the vendor’s account, and do other things that can permanently damage the brand’s reputation.
Protection against ecommerce fraud
The above are only a few of the methods employed by fraudsters. But you can protect your business and your customers with these suggestions.
- Install an excellent online security system. Work with a reputable security company that can assess your online business needs and recommend the right solution. Choose one that is scalable and has regular updates.
- Perform regular security system audit. You don’t know when the cybercriminal will attack. It is vital to audit your security system regularly to ensure that it is not vulnerable. You and your employees should periodically change your passwords and encrypt sensitive data.
- Consider setting limits on your purchases and deliveries. Analyze consumer data and determine the size of purchases, and set a maximum limit per customer. It is one way to spot a fraudster. Likewise, require customers to provide physical addresses. Refuse to deliver to P.O. boxes and unspecified locations. Do not allow your customers to use freight forwarding services.
There are many ecommerce security platforms to keep you and your customers safe. Work with a company that offers a robust ecommerce fraud management solution with features that fit your business.