How do you spot online fraud when over 60% of shoppers say they would not return to a store where they were victims of fraud? The defensive attitude is understandable, even if this does not always happen due to the store's fault. As such, discover the most common types of fraud in eCommerce and what you can do for e-commerce fraud protection. Lately, in many companies, you will hear about ecommerce fraud management, a good strategy business owners implement for employees to be aware of potentially fraudulent behavior.

E-Commerce Fraud Protection for Abuse of Return Policy

This type of fraud is one of the most common in some countries: consumers place orders (usually some with an above-average value) and then return most, if not all, of the products. That happens sometimes because the order was placed impulsively, and the customer realized he could not bear the expense. Other returns, however, are made when the customer wants to use the products only for a photo session or an event - especially for premium clothes and accessories. For a store, any of these behaviors means significant losses. Therefore, e-commerce fraud protection is needed in such cases.

Ecommerce Fraud Management - a Prevention Tool

When clients abuse the return policy, you will pay for both the transport and the return, and many of the products cannot be resold. The law is on the side of consumers, but you can limit the number of abusive returns. For example, as an ecommerce fraud management measure, you can ensure that your flexible return policies will not be abused by adding customers to the Blacklist, a function that you can easily install. After installing the application, you will be able to define a series of personalized rules and, based on them, restrict the access of specific customers.

You can also restrict certain customer types to placing orders in the shop and other functionalities of the store, such as the cash-on-delivery option. At the same time, adding the respective customers to the "blacklist" of the store is a form of e-commerce fraud protection, allowing you to identify them more easily in the order lists, and you will immediately know how to approach the situation. Thus, you can reduce the risk of potential fraud in the store, and at the same time, you can reduce unwanted expenses by limiting the placement of false orders and by restricting non-paying customers.

Phishing or Taking Over Customer Accounts by Hackers

In case of a severe security breach, numerous emails and accounts on different platforms are compromised, and hackers will try to maximize the profit they can make from them. One of the ways to maximize profit is to take over customer accounts from eCommerce sites. In short, an attacker who gains access to an email address will place orders on behalf of the victim, especially if the latter has the card data saved in your store. You can expect multiple requests to cancel orders and refund money in that situation. When the clients turn to the banks, you must reimburse them the amounts paid on their behalf.

Credit or Debit Card Fraud

As the name suggests, this type of fraud uses stolen card data. Criminals can use the physical card or only the data on it. The second situation is the one in which you can intervene, which is something to consider as an ecommerce fraud management measure: a card's data can be stolen when entered through an unsecured connection. That's why, if you choose to offer in your store a payment page completely hosted on a website designed for this, you must have an SSL certificate installed and active.

In addition to protection against fraud, the SSL certificate can also help you from an SEO perspective (secure sites have more visibility) and gain visitors' trust (most will NOT enter their data on a site that does not have a secure connection). Although you cannot always tell if a card is stolen and used fraudulently, it is essential to always be on your guard to get e-commerce fraud protection. If a damaged person addresses the police, you must compensate them for the orders placed on their behalf, even if you are not to blame for the theft of the card data.

The types of fraud are constantly evolving and diversifying. Therefore, your security policies must grow in turn. The good news is that experts in ecommerce fraud management are continually developing tools to help you prevent fraud and cyber attacks. However, in parallel, it is recommended to:

• Recommend your clients create hard-to-crack passwords (with more than eight characters and containing letters, numbers, and alpha-numeric symbols);
• Constantly review the returns policy;
• Confirm suspicious orders by phone, especially those with cash on delivery;
• Please pay attention to suspicious spikes in the number of orders, their value, and multiple orders from a single affiliate.

How Cybercriminals Act

Dangers lurk at every step in the eCommerce ecosystem, but you have several tools to reduce these risks for your business. In the current context, one of the most essential e-commerce fraud protection you can take is ensuring that the eCommerce platform offers you an optimal level of online security. Fake sellers displayed highly sought-after items at advantageous prices, contacted potential customers, asked them to discuss more on different platforms, and, after pretexting that they could not meet in person, provided a link where the payment for the respective product would be made.

As you can expect, that link leads to a clone site, explaining that the money was to be blocked in the platform until the actual delivery. Predictably, after appropriating the card data (number, CVV code), the money was withdrawn quickly, and no one received any product. As you can see, the pretexts differ, but the strategy remains relatively unchanged:

• Redirecting the victim to clone sites and
• Taking advantage of his carelessness
• Extracting the card data and, later, the money

As ecommerce fraud management experts recommend, the simplest method is to keep a card only for Internet transactions.

The second way to e-commerce fraud protection is to always redirect the amounts in the card account to the savings account when they exceed a specific value. That is if your package of products and services also includes a savings account. In this way, the balance of your card used for online transactions will always be anemic. Every time he makes a purchase, the cardholder will move the money from the savings account to the account attached to the card; every time he has a payment, he will transfer the excess amounts back to the savings account.