Credit Card Fraud Prevention Tips for eCommerce
March 8, 2010 by Pablo Palatnik
One of things that can literally take your e-commerce business down quick is online fraud. As online sales grow, so does fraud and its something that needs to be taken very seriously and part of your ecommerce business should be devoted to have some protocols in place or strategy to prevent fraud at all cost.
Now, to get real, you wont be able to stop fraud. The most you can do, at this point, as these online ID thefts get smarter, is minimize fraud which should be the goal until you have such few fraud issues that they wont affect your bottom line. So much time small businesses are focused on sales and the push of marketing that you need to put things on pause for a bit and make sure you’re looking at your fraud prevention methods to ensure you’re not shipping out orders to fraudulent customers. This is such an important and hurting issue to merchants because at the end of the day, you WILL LOOSE chargebacks on fraud for the most part.
So, what are some steps you can do to see if you’re order is a fraudulent one?
1) IP ADDRESS – The IP address of an order can be telling of fraud. Let’s say you have an order that is large and you’re weary about shipping it. You can tell by the IP address what country its from so if you have an order with a billing address (2nd warning) with a country such as U.S. and the order going to somewhere like U.K., Canada, Iceland, etc, you can tell by IP where the order originated. You can see that here http://whois.domaintools.com
2) BILLING ADDRESS – The billing address is an important element in an order because if an order has a shipping address that is different than the billing, there is room for concern. Nevertheless, millions of people shop for each other so its a common thing but it is something to look for. It is recommended by processors that for first time customers, you ONLY ship to them if they have the same billing and shipping. If you are dealing with major online fraud issues, implement this rule until you can see a decline in fraud, if not, just something to look for any weird signs.
3) AVS & CVV2 CODES – These two codes are very important in an order detail. The AVS is the address verification and the Cvv2 is the 3 digit number on the back of the credit card (4 digits for AMEX in front). Make sure you have a system in place that will tell you if these two will match or not match. If the AVS code doesnt match but the Cvv2 does, its to your discretion whether to ship order or not. IN THAT CASE, we call customers to make sure someone picks up.
4) PHONE VERIFICATION – This is one of the best ways to prevent fraud but its not 100% proven. Somtimes these thiefs have the nerve to actually put a number where they can be reached just for this purpose, but most of the time, if the number is legit and someone verifies the order, you’re good to go. Ask them to verify details such as cvv2, etc.
5) EMAIL ADDRESS – An email address COULD BE telling of a fraudulent order. Now this may just come from instinct or common sense, but if you look at an orders email, you can tell if it may be someones real email address or fake. You can also Google that email address as it may appear someone may have it on some report as a scam, etc.
I just came acorss this site, ScamBusters.org, and you can check out updated scams going on online.
