Tips to Minimise Online Fraud

Online fraud is always in the media and on mind of customers and merchants. If you went by the media reports you would be mistaken to believe that the banks and customers bare the majority of the risk.

The fact is the merchant bares the majority of the cost of online fraud, and if you sell digital good or services your chances of winning a chargeback case are dramatically reduced. Fraud is steeling and steeling hurts, nobody likes having someone stolen from them.

People often see the issues as complex, put the issue in the too hard basket and do little or nothing about it. Putting some simple business rules in place, while not eliminating fraud, can significantly reduce the impact on your business.

Here are some simple rules I would suggest you incorporate into your fraud plan:

1. Not all customers are the same

Your longer-term loyal customers tend to create less online fraud. Focus your efforts on new customers who you have not done any business with in the past.

2. How quick can your products be turned into cash?

There are some industries that are more prone to fraud. If the product or service can easily be turned into cash then it is ripe for fraud, for example the pre-paid mobile recharge and computer equipment industries generally have higher fraud rates than other industries. If this is you then you need to put more effort into fraud protection.

3. Big orders

Whilst getting a big order or a lot of orders from a new customer feels good it pays to treat this orders with caution.  Remember, if it is too good to be true, it usually is.

4. Does it all match-up?

Do your customer’s credit card details; delivery address details and IP address match. If the customer is using a U.S. credit card with a Sydney delivery address and the IP address is blocked then maybe you should investigate the transaction further.

5. Strange purchasing behaviour

Has a long-term customer changed their delivery address or are they purchasing more abnormally than normal?  Again it may pay to investigate further. The worst case is that you provide your customers with some extra attention.

ezimerchant provides you with tools to help support you as you build out business rules to detect and manage fraud. If you have any concerns or questions the ezimerchant support team are available to assist.