E-commerce fraud is on the rise, and criminals become increasingly brazen with their online purchases during these busy sales times.
It’s time to take action now, before the increase in holiday traffic and sales diverts your attention away from cybersecurity.
The fastest way to identify and prevent e-commerce fraud is to understand how fraudsters do it. This can include:
However, not every red-flagged transaction is fraudulent. Many seemingly suspicious transactions are in fact placed by honest consumers – like people shipping presents to out-of-state family members or procrastinators needing to get that gift delivered ASAP. Can your e-commerce platform tell the difference?
To make sure all legitimate transactions get processed (while stopping fraudsters in their tracks), scrutinize and validate all suspicious orders before fulfilling them. For example, you might choose to:
Acting proactively – like developing alternative verification methods and properly staffing the department who’ll investigate questionable transactions – is the best way to fight online shopping fraud.
Today’s fraudsters are clever. There’s more than one way to commit online fraud, and cybercriminals are dedicated to finding every last crack in your online security.
The newest trend? Fraudulent orders placed for in-store pickup.
In today’s “next-day,” “two-day” shipping world, frantic holiday shoppers want to be able to send their gifts fast. A common response from merchants has been to add an “in-store pickup” option to their e-commerce shopping carts. Some even offer pickups within an hour.
Naturally, this option is wildly popular; as many as 44% of consumers want immediate gratification after purchasing an item.
Unfortunately, criminals love this option too.
For fraudsters not physically possessing a stolen credit card, it’s much easier to pass security measures online than at the checkout counter. However, it’s more difficult online to get past other security measures – such as red flags that may be triggered when the fraudster requests an order be shipped to an address different from the billing address.
But ordering online and picking the order up at the store rather than the card holder’s address? It’s the best of both worlds, if you’re a thief. You don’t need to have the credit card in your possession, AND you don’t have to worry about being flagged for shipping to a different address. Bingo!
Add to that the fact that most stores don’t require customers to present an ID for pickup or re-swipe the credit card used for the purchase, and it’s a clean getaway.
Worse, this type of fraud can be frustratingly difficult to detect. Recent data breaches have released not just card data, but also cardholder ZIP code information. This allows criminals to target nearby retail stores without raising suspicion – security warning are not likely to be raised, since the cardholder and store ZIP codes either match or are nearby.
Top on the list for this type of fraud? Typically it’s big-ticket items – such as Apple products, TVs and computers – that can quickly be resold for nearly their full purchase price.
Online shopping fraud may be thought of as part and parcel of the busy holiday shopping season, but it doesn’t need to be. The right preparation can stop fraudsters in their tracks.
Review your safety standards, and take precautionary measures like these to ensure a happy holiday season for all:
In particular, check that your fraud protection solution can handle the volume the coming months will bring. Don’t take a conservative approach to online security.
Be prepared. Be ready. We can help.
To learn more about our total, guaranteed fraud protection, contact one of our fraud protection analysts. Email us at contact@clear.sale to get started today.