When it comes to shopping easily and comfortably, e-commerce has grown to become an essential part of our lives. It offers us the chance to get different goods and services from the comfort of our home. As clients enjoy these benefits, e-commerce brands also make tons of money from their varying activities on the internet.
However, it is noteworthy that numerous individuals and groups are preying on the supposed vulnerability of e-commerce to defraud brands and their customers. Because of the anonymity and ease offered by e-commerce, these criminals cut corners and make fraudulent orders. Therefore, it is paramount for e-commerce brands to use anti-fraud systems to protect themselves against fraudulent orders.
What are the types of e-commerce frauds?
E-commerce frauds come in different forms including:
- Credit card fraud
- Chargeback fraud
- Account takeover or phishing
- Coupon or promotion fraud
- Triangulation fraud
- Affiliate fraud
- Interception fraud
A step-by-step guide to protecting e-commerce from fraudulent orders
Without a doubt, fraudulent orders are unwanted realities for many e-commerce brands. Therefore, businesses need to take steps to protect their online businesses from fraudulent orders.
E-commerce brands can prevent fraudulent orders by doing the following:
Establish an anti-fraud system
Factually, online fraud is one of the banes of e-commerce. It has discouraged lots of potential customers from doing business with numerous e-commerce merchants. Therefore, it is paramount for every e-commerce merchant to establish an anti-fraud system that works all around the clock to deal with fraudulent activities on their platforms.
Notably, there are numerous programs designed for detecting and preventing online fraud. So, don’t shy away from investing in such anti-fraud tools.
It should be understood that anti-fraud tools come at different levels. There are basic anti-fraud systems, mid-level anti-fraud systems, and top-level anti-fraud systems. You just need to find the tools that offer the best security to your platform.
Ensure regular site security audits
In many cases, fraudsters only explore the security flaws on e-commerce platforms. Therefore, if merchants can detect and deal with these security issues on time, they can prevent fraudulent orders from taking place.
Generally, a site security audit will involve:
- Validating the functionality of the SSL certificate.
- Checking and updating shopping-cart plugins and software on the site.
- Checking whether the passwords for hosting dashboards, admin accounts, FTP access, CMS, etc. are strong or not.
- Determining whether communication between you and customers/suppliers is encrypted or not.
- Scanning website for malware.
Check the site regularly for suspicious activities
Are there any red flags in the transactions or accounts on your website? Do you notice any inconsistencies in the physical location or shipping info of some customers? Are you getting lots of traffic from countries associated with lots of fraudulent activities? These are possible red flags that can tell you that you are dealing with some fraudulent customers.
In addition, if you are using social media to promote your business, you must ensure that fraudsters don’t hack your account. As you are getting lots of Instagram followers and likes, some fraudsters may pretend to be you and, as such, defraud existing or potential customers. So, you need to alert your customers of any fraudulent activities on social media.
Make sure your business is PCI-compliant
In 2006, the PCI Security Standards Council put some security standards in place to deal with fraudulent activities. MasterCard, the Japanese Credit Bureau, Visa, Discover, American Express, etc. are some of the leading members of the council. The security standards are targeted at making sure that e-commerce platforms can reduce data theft, breaches, and fraud through the way they get, keep, and transmit credit card information.
So, you need to learn about how these standards. Then, make sure that your e-commerce platform is PCI-compliant.
Utilize hypertext transfer protocol secure (HTTPS)
HTTPS refers to a basic protocol responsible for the exchange of data between an online platform and the browser of a user. This protocol plays a key role in the encryption of the data of customers such as the names and addresses of customers, credit card details, and lots more. As a result of this, HTTPS can prevent cyber-fraudsters from getting access to the data of your customers.
Always ascertain card verification value (CVV)
If you look at the back of a debit or credit card, you will see a three- or four-digit code. This security code is known as the card verification value (CVV). The essence of this code is to ensure that only people with a physical credit or debit card can use it for any transaction.
Therefore, if you want to protect your e-commerce platform against fraudulent activities, you should always request CVV. This step will lower the risk of credit card fraud on your platform.
Don’t collect unnecessary sensitive data
Many e-commerce platforms are fond of collecting numerous information from their customers. Unfortunately, this can make customers susceptible to some fraudulent activities. Given this, e-commerce merchants should only focus on acquiring data that is useful for online transactions and shipping of goods to customers.
If you don’t need dates of birth, social security numbers, etc. to complete a transaction on your platform, you don’t have to request them. With this, fraudsters cannot have access to such sensitive information on your platform regardless of the data breaches.
Confirm if the credit card address matches the IP address
In most cases, fraudsters are not in the same physical locations as the credit card owners. Therefore, you may be able to lower the risk of credit card fraud by cross-checking if the credit card address matches the IP address of the user.
To do this, you can get in touch with the credit card company to get the credit card address. This can be made easy and possible by using an address verification service (AVS). Afterward, you need to compare it to the IP address of the order. You can do this within a few minutes. Once there is any suspicion, you can decline the order and request further verification from the credit card user.
In conclusion, online fraud is a real issue plaguing the world of e-commerce. However, if e-commerce platforms can go the extra length, they can lower the risk of fraudulent orders.