How To Protect Your eCommerce Business From Frauds
Online shopping grows daily. This has therefore served as space for cyber criminality and unnecessary scam. Currently, online businesses deal with approximately 206 000 attacks on their stores per day. This alerts you to jealously guard your online store against hackers and fraudsters who might hack into your system and rob you. Since such cases negatively affect the business’s status in terms of profits and revenue.
Ecommerce refers to commercial transactions done electronically over the internet via an online store. The transactions are done through phones, tablets, desktops, laptops and computers.
Ecommerce fraud is a criminal deception done in a commercial transaction via the internet with the aim of financial or personal gain of the fraudster but negatively hindering the retailer's bottom line.
Online fraud has increased due to several factors, including; easy access via the internet, anonymity since the majority can't see the crime, evasion since most anti-criminal bodies don't mind it, and more other factors.
Some of the ecommerce fraud cases include; affiliate fraud, chargeback fraud, credit card fraud, account take over fraud, triangulation fraud and interception fraud.
You can tell that ecommerce fraud is likely to happen if you are;
Getting inconsistent order data
Strings of orders from a new country
Very many orders from many credit cards
Multiple declined transactions in a row
Multiple transactions in a short period
Larger average order
Many shipping addresses and unusual location
Here is what you need to do to protect your ecommerce business from fraud:
1. Do site security audits
Doing site security audits helps you identify flaws within your security system before getting an attack from fraudsters and criminals.
To create and put in place a robust security system that can't be easily hacked by fraudsters, ensure that you;
Do away with inactive plugins.
Scan the website quite often to check if there is any malware
Backup your online store regularly
Encrypt communication between your store, clients and suppliers
Have your shopping cart software and plugins updated
Use strong passwords for administration accounts, hosting dashboards, CMS, database and FTP access.
Have your SSL certificate current and working
Have your store payment card industry data security standard
2. Monitor your transactions every day
Being the owner of your online retail store, I presume that you know your business and your customers better than anyone else. So the moment you notice that some aspects of your business have become a bit predictable, that’s an alert for you to find time to review your receipts and transactions records. That should be done daily.
Doing a daily review helps to find dubious transactions easily. Also, the more you monitor your daily transactions, the easier it becomes for you to track any incoming fraud. This alerts you to find means to fix fraud and prevent such occurrences in the future.
3. Request for Card Verification Value numbers before making purchase orders
Requesting customers to give you their CVV number while making purchases assures you that client(s) possess the physical credit cards—this aids in keeping your clients and your business safe from fraud. The CVV numbers include; the three or four-digit security code at the back of the VISA card, MasterCard, Discover credit and debit cards, and American Express credit and debit cards.
4. Ensure compliance of your Payment Card Industry Store
If you have an ecommerce business that allows Credit Card Payments ensure that your Payment Card Industry is compliant. The Payment Card Industry Security Standards Council must have developed and managed your compliance standards. This helps you ensure that credit card transactions in the payments industry are safe.
To guarantee security compliance, your PCI standards must meet those of online store and business processes. Therefore, for entrepreneurs already operating SaaS ecommerce businesses, you have to be sure that your platform meets the required compliance standards to guarantee safety.
5. Use Address Verification Service
Address Verification Service helps to sense suspicious credit card transactions in real-time. This means that any ongoing fraud can be detected quickly and stopped with immediate effect, thus preventing fraud.
Address Verification Service checks the billing address submitted by a customer while comparing it with the customer's billing address in the file of the issuing bank.
The checking is done as part of the merchants' request to the payment processor for authorization of credit card transactions. In case the address entered by the client doesn't match the address in the file of the issuing bank, the system declines or flags the transaction for further investigation details. This has helped to reduce ecommerce fraud.
6. Checkout your site for any suspicious activity that could be taking place
Protecting your store against fraud is very important. You can achieve that by frequently checking out your store for suspicious activities. In addition, you can consistently monitor your accounts for red flags, for instance, inconsistency in billing, information regarding shipping and the physical location of the audience or a customer.
You can use tools to track customer information, for instance, customer IP address. The tracking tools help you be aware of any addresses from countries that are best known to have fraudsters. You can as well hire fraud prevention officers to catch shoplifters. This method is used by an online company known as Bricks and mortar stores.
7. Don't allow non-physical shipping address
Most fraudsters protect themselves by keeping their physical address anonymized. Meaning that you can't locate where these people are just in case fraud happens. This clearly explains to you why most of them usually use P.O.BOX or any other location that can't just be found.
Therefore, if you are a businessman or woman and want to deal with those kinds of fraudsters, you have to stop shipping online orders for P. O. Boxes and other virtual addresses.
8. Use Hypertext Transfer Protocol Secure
Hypertext Transfer Protocol Secure is a safe tool that is the primary protocol used to exchange data between the client's web browser and your online store. In addition, hypertext Transfer Protocol Secure encrypts data to keep sensitive customer information safe, for instance, the clients’ names, address details and Credit card numbers.
Deploying Hypertext Transfer Protocol Secure protects your store from getting transaction broadcasts since hackers, fraudsters and cybercriminals can easily view these.
9. Check whether the IP address matches the Credit Card address
Each customer who orders from your online store comes with a unique public IP address. So you can use the IP address to tell the city or the country where the buyer is making purchase orders from. If you realize that the IP address of the purchaser doesn't match the Credit Card being used, you should be able to discard that order because the chances are high that it could be a fraudster.
10. Don't collect susceptible customer information
Much as having customer information is very important, maybe for following up and ensuring a good customer experience. It is also another way that fraudsters use to hack into the company's system. Capturing and keeping a little of each client’s data is one way of protecting your store from Fraudsters and hackers.
Hackers can only hack what they can access. So all you need to collect is the information regarding transaction details and the product's shipping. Stop information collecting birth dates, security pins, and any other sensitive customer information. You might not use it at the time or even in the future.
11. Use anti-fraud solutions
There are so many software tools that you can use to prevent your store from online hackers. You can easily find software that suits your needs and your budget. Different tools carry different budgets depending on the amount of work that has to be done on installation and management. While some companies love to have hands-on building and management, others prefer having experts do it themselves.
There are three different anti-fraud solutions; these include; rudimentary anti-fraud tools. These are integrated into online shopping carts and ecommerce platforms, and they use machine learning algorithms to identify fraudulent transactions via IP geolocation, email addresses, fingerprints and more. The rudimentary anti-fraud tools perform a specific and single function.
There are also mid-level anti-fraud tools that perform many functions, including; chargeback guarantees, an automatic decline of high-risk orders, account take overprotection and more.
There are top-level anti-fraud tools that perform all the functions and outsourced case management, loyalty fraud management, policy abuse protection, automated decisions, manual review of suspicious transactions and many other parts.
Depending on the number of customers you have and the order of revenue and trends, you can limit the number of purchases and total dollar value you get from one account per day. This will help you decrease fraud due to reducing exposure to fraudulent occurrences.