Ecommerce fraud is growing at an incredibly high rate. If you run an eCommerce store, there are several different types of fraud that you and your digital storefront should be prepared for. Common types include refund fraud, phishing, card-not-present fraud, triangulation fraud, affiliate fraud, identity theft, clean fraud, and friendly fraud. We have discussed below a few tried-and-tested fraud-prevention tips that can help save your online business from hackers and the resultant loss of money:
1 – Review your transactions for malicious activity
As a business owner, you know your business and customers better than anyone, so no person is in a better position to detect fraudulent transactions than you. You probably know your most loyal customers and their spending habits, to the extent that if anything suspicious pops up in your transaction log, you can point it out with ease.
For example, if a customer changes their shipping address and wants to receive the product quicker than usual, it means there is a good chance someone has unlawfully gained access to their account. Another red flag to watch out for is when the same account makes several purchases using multiple credit cards.
2 – Be proactive about your anti-fraud measures
In most cases, either the payment or digital retailer solution you choose will have some sort of anti-fraud system in place. Take time to understand how it works, how it protects you and most importantly: how much friction does it introduce to the purchasing process?.
Depending on your needs, you may need dedicated fraud prevention solutions that go beyond the platform’s default offering – in most cases, the time spent on tailored solutions pays for itself with its advantages over a default set up. Remember: it’s not just about preventing chargebacks, but having the least amount of false positives possible without frustrating your customers with verification checks.
3 – Don’t keep data that you don’t need
You become a target of hackers and fraudsters if you possess sensitive customer data. Staying away from unnecessary personal and credit card information is one of the most effective fraud prevention tools. Take only information that you will need for transactional purposes, and leave out what’s likely to invite trouble.
For recurring payments, set up strategies to meet all PCI-compliance requirements, and invest in proper card information storage technologies.
4 – Adopt SSL encryption
Your customers and prospects want you to show them that you have done your best to ensure your website and data are safe. One way you can achieve that is by securing your eCommerce store with SSL encryption. SSL certificates encrypt the data being sent to and from your site, ensuring the privacy of all communications between your server and web browsers.
There are dozens of SSL certificates to choose from for your site, with some even being offered for free. However, before installing a certificate, ensure it provides 256-bit encryption.
5 – Use the past to predict the future
As the saying goes, experience is the best teacher. If there have been fraudulent transactions on your site in the past, it is best to record them and try to spot similar patterns in the future. This approach will help you know important information such as the countries where most fraudulent transaction attempts come from and what the hacked merchant accounts have in common. It can also help you identify vulnerabilities and security threats that you may not have spotted any other way.
6 – Set purchase limits
Chargeback fraud is one of the most common types of fraud, and the worst part about it is that it is virtually impossible to tell genuine chargebacks from fraud. The best way to deal with it or at least reduce its impact on your business is to set limits on the purchases new customers can make in a single transaction or within set timespans. Big purchases yield high chargebacks that can have a significant impact on your bottom line.
7 – Use the latest software versions
Software updates are usually released to offer new features, improve the interface, and patch up security weaknesses in previous versions. Ensuring you install the most up-to-date software and platform versions protects you from potential exposure to hackers and fraudsters.
Running an eCommerce store has its upsides and downsides. Fraud dominates the flip side, and that’s something you should work to ward off if you want to make good in the online space. The above tips should help you set up a robust anti-fraud strategy and protect your business’s reputation.