Fraud accounts for nearly 27% of all digital transactions. That amounts to thousands of dollars lost every year for retail and eCommerce businesses. And with the increased demand for online shopping, the numbers will likely continue to rise.
This can mean big problems for retailers, who have to strike the balance between cracking down on fraud and providing a convenient online shopping experience for their customers.
Luckily, with International Fraud Awareness Week right around the corner, there’s no better time to start re-evaluating your approach to fraud than right now.
What is Fraud?
Generally speaking, fraud is any dishonest or misleading behavior done with the intent to gain an undeserved, unfair, or unawarded benefit. In the case of eCommerce transactions, it’s often payment fraud in its varying forms that take center stage. This includes friendly fraud, chargebacks, and more — many of which can be difficult to identify.
In honor of promoting the mission of awareness and fraud education through International Fraud Awareness Week, we’ve put together 4 ways you can prevent fraud from affecting your business.
When credit card theft occurs, fraudsters often have a significant amount of information at their fingertips, like credit card numbers, cardholder names, and addresses. This can make it difficult to identify fraudulent card use when it occurs.
However, in many instances, fraudsters don’t have all the information attached to the card. They merely skimmed the number with the intent to use it at point of sale (POS) and online payment portals without added layers of security.
Adding an additional request at the end of the payment form for the card’s CVM (cardholder verification methods) or CVV (card verification value) number can quickly deter many fraudsters from attempting to push the transaction further. And because it’s incredibly simple to enter, it also doesn’t increase your risk of rejecting legitimate transactions or frustrating customers.
In many instances where fraud is taking place, shipping addresses will likely not match the card owner’s actual address. This might be because fraudsters are unable to access the information, but more likely, it’s due to the fact that they live in a different location.
By comparing the shipping address attached to the order with the card holder’s permanent address, you can more easily identify fraudulent activity when it occurs. That isn’t to say that every order shipped to a different location is fraudulent — as customers do purchase products as gifts for family and friends in other parts of the globe or with more recent events, having to switch from an office address to a home address — but monitoring shipping address information can play a useful role in the identification process.
Track Previous Fraud
Believe it or not, fraudsters don’t always strike once and disappear. If they’re successful, there’s a chance they’ll attempt to steal from your business again. Keeping a record of all fraudulent activity makes it easier to see repeat attempts when they occur, which means you can more easily reject fraudulent transactions from taking place.
But even if a certain fraudster never returns to your eCommerce site again, they still provide valuable information that your team can use to identify fraudsters more easily in the future. From mismatched addresses to large orders, the red flags will help you and your team get more accustomed to recognizing fraud when it occurs.
Leverage a Fraud Protection Platform
Even after requesting detailed payment information from the customer and reviewing addresses, it’s still possible to be duped by fraudulent activity from time to time. Payment protection platforms hedge your business, by putting an extra layer of security between your products and fraudsters.
With fraud protection tools like Radial’s Fraud Insight, you can accurately pinpoint fraudulent risk without turning away legitimate customers by leveraging machine learning technology and consortium data to assess the risk of every transaction. And with Fraud Zero, you can access Radial’s fraud protection solutions with zero liability.
This means you can focus on keeping your customers happy and rest easy knowing fraudulent activity is being handled.
Unfortunately, fraudulent activity isn’t going to go away. As online shopping continues to grow in popularity, it will expand to affect more retail and eCommerce businesses more often. However, by adopting fraud protection technology, putting extra verification methods in place, and learning from previous fraud attempts, you can minimize its impact on your business.