Many business owners hesitate to move into a heavy eCommerce focus in part because of concerns over fraud. They fear it is too easy to use a stolen card, which leads to chargebacks and other cash flow problems. Fortunately, you can take steps to prevent and reduce fraudulent purchases. Implement these practices immediately to protect yourself against fraud.
Credit and debit card payments provide a great deal of data. Address verification service or AVS helps ensure that the address given at the time of payment matches the address associated with a card. If it does not, you should follow-up before approving a purchase.
Similarly, you should require the card verification value or CVV code to approve eCommerce purchases. This helps ensure the person making a purchase has the physical card he or she is using.
3. Confirm Large Orders
If a customer is new, or usually makes small purchases from you, a large order can be a red flag for fraud. Take the extra step to ensure the customer is who he or she claims to be if they intend to make a large purchase.
4. Multiple Card Transactions
A purchase using multiple payment cards can also raise suspicion. This doesn't automatically mean the purchase is fraudulent, but it can indicate a desire to spread activity out to avoid suspicion. If you allow split transactions, take steps to verify the purchase.
5. Set Password Requirements
Many customers use simple, easy-to-hack passwords when they create an account. Set requirements for user passwords that include numbers, symbols, and other factors to prevent hackers from simply guessing passwords.
6. Multi-Factor Authentication
More eCommerce sites today also require multi-factor authentication, requiring a device as well as a password to log in. Setting this requirement creates a strong security barrier that is more difficult for hackers to work around.
7. Check International Orders
Some countries are hotspots for eCommerce fraud. If you are receiving unexpected international orders, run additional security steps to ensure the buyers are legitimate.
8. Warning Language
Sometimes a basic warning can fend off would-be data thieves. Give a statement on your website stating your return policy, and letting users know that you actively monitor for fraud.
9. Use Analytical Tools
No matter how diligent you are, you cannot manually identify all suspicious activity on your eCommerce site. Work with a payment processing partner that automates its payment analytics to help fend off fraud.
10. PCI Compliance
Your processor should maintain PCI compliance as a matter of course. This set of standards should serve as your baseline, both to ensure you have strong security and to give you a process you can defend when something goes wrong.
No one can prevent every instance of eCommerce fraud. If you take the right steps, you can reduce your risk and protect your business. Implement a strong process with your payment partner.