With more and more shoppers flocking to your virtual storefronts, it’s no surprise that fraudsters are hot on their heels. We think 2023 is the year to fight back against eCommerce fraud and protect your shoppers.
This blog post will share clever and cunning ways to outsmart the bad guys and keep your online store well-defended. So don your armour, sharpen your swords, and get ready to defend your eCommerce kingdom from the forces of fraud.
4 Types of Ecommerce Fraud and How You Can Prevent It
1) Account Takeover Fraud
This occurs when a fraudster gains access to your shopper’s account, usually through phishing or malware. Once the cyber-criminal has access, they can use their account to make unauthorized purchases. They can also change personal information, and even steal sensitive information such as credit card details. This eCommerce fraud can be particularly damaging to your online store and its shoppers, as it can lead to financial loss and damage your reputation.
To prevent account takeover fraud, you can implement multi-factor authentication. This requires your shoppers to provide multiple forms of identification, such as a password and a fingerprint or a one-time code sent to their phone number.
2) Payment Fraud
Payment fraud is using stolen credit card information, creating phoney credit cards or using phished payment information. This type of fraud can cause significant financial losses for your eCommerce store. Unfortunately, you may not be able to recover the funds from a fraudulent transaction and may also have to cover the cost of chargebacks.
To prevent payment fraud, merchants can use tools such as Address Verification Service (AVS) and Card Verification Value (CVV) checks to verify the details of a payment method.
3) Returns fraud
Returns fraud, the ultimate bait and switch of the e-commerce world. Where a fraudster, disguised as a loyal customer, tries to pull a fast one on you by returning items they never actually bought.
However, by keeping detailed records of all transactions and requiring proof of purchase, you can make sure those fraudsters get nothing but a one-way ticket home.
4) Affiliate fraud
Affiliate fraud happens when some shady characters try to make a quick buck by creating fake affiliate accounts and cashing in on counterfeit purchases. But don’t let these fraudsters ruin the party for everyone, merchants!
Using fraud detection tools to monitor affiliate activity and manually review suspicious accounts, we can ensure that only legitimate affiliates get their slice of the pie. Not only does this protect your store’s bottom line, but it also ensures that your shoppers get the best deals from legitimate affiliates.
Payment Gateways To Close the Doors on eCommerce Fraud
Payment gateways, the secret weapons of eCommerce fraud prevention and customer satisfaction! With their advanced fraud detection technology and built-in security features, using payment gateways can be like having a personal bodyguard for your shopper’s transactions.
Not only do payment gateways provide advanced protection systems like 3D security, AVS and secure encryption, but they can also help you drive more sales through payment options like Buy Now Pay Later (BNPL).
For a more in-depth analysis, look at this detailed article on payment gateways.
Conclusion
In the wild, wild world of eCommerce, fraud prevention is not a luxury; it’s a necessity! With so many opportunities for fraudsters to strike, it’s important to stay vigilant and protect both your shoppers and your online store. From implementing multi-factor authentication to using advanced fraud detection tools, there are plenty of ways to stay one step ahead of the bad guys.
So don’t let the fraudsters rain on your eCommerce parade; arm yourself with the knowledge and tools you need to keep your shoppers and store safe. With the right prevention measures in place, you’ll be able to focus on growing your business and making sales without bearing the weight of eCommerce fraud.
