Mitigating fraud has become very much a part of e-commerce credit card processing, much to some merchants chagrin. Perhaps it’s not how some merchants envisioned running their business when they launched 15-20 years ago, but protection against criminals and unsavory ‘customers’ – in other words, fraud and chargebacks – is a necessity. Every online business is under threat.
With the rash of data breaches over the last four-plus years, particularly that of disgraced credit bureau Equifax, it’s safe to assume that your business and/or personal information is already in the hands of hackers and fraudsters. And if you really want to be certain, log on to HaveIBeenPwned.com, and type in each of your e-mail addresses. That will give you a definitive answer if your e-mail account has been compromised in a data breach.
As technology for fraud prevention is ever-advancing, so are online criminal tactics.
Recently, we asked several of e-commerce merchants what preemptive measures they take to defend their businesses and what they recommend to other merchants. Some responses may sound predictable and repetitive, but several tactics pleasantly surprised us.
Threats against e-commerce credit card processing and how to ruin a fraudster’s day
- When billing and shipping address differ: Predictably, this was the consensus No. 1 sign. “It could be a gift, but it’s always good to check,” said one merchant, who sells online seafood delivery overnight. “There are certain details to ascertain it’s a gift, such as whether it’s over a certain amount and/or where it’s going?”
- Sudden, abnormally large orders: “Right away, my guard is up when I see this,” one online merchant said. “Someone is trying to cash out in a small time frame.”
- Last minute purchases: When merchants are overwhelmed at particular times of year, this is often an effective tactic. “I see a lot of this between Thanksgiving and Christmas,” a merchant explained. “Fraudsters are hoping their bogus orders will be lost in the hustle and bustle of the holidays.”
- Odd e-mail addresses with long prefixes: Spammy e-mail addresses are strong signals that the fraudster is using bots to infiltrate a website
- Phone numbers that don’t work: It was encouraging to hear several merchants advocate telephone use and contact with customers when something suspicious arises. “If I see anything strange about a purchase on my website, I’ll simply make a phone call,” a merchant said. “If I can’t get through, I’ll put the order on hold until I can contact them by phone or e-mail. It’s always good to call the person who made the order.”
- IP address matching: Back to the age old shipping-billing mismatch: Check to see if the IP address matches the same vicinity of the delivery address.
- Ascertain the delivery address: This is where Google Maps and Google Earth are invaluable tools. “What I sell isn’t cheap,” said the seafood merchant. “When I’m checking the ship-to address and it looks like a roughshod area, it’s a concern.”
- Repeat declines with a credit card: – Consistent credit card declines indicates the ‘customer’ is attempting to make purchases with multiple – likely stolen – credit cards.
- Fraudsters will create profiles: Determined criminals will register online and even use gift messages. “I’ve even been on the phone with fraudsters,” said the seafood merchant. “He was from the middle of nowhere. While we were on the phone discussing details, I saw he had a criminal record and had recently been released from jail.”
- Call the credit card issuing bank: This is a very underused resource. When a suspect transaction appears, one merchant said the card issuing bank can determine legitimacy.
Several merchants indicated they use machine learning to sort out the bad actors, but still perform the basic checks listed above. “The bottom line, it’s always good to call the customer. If your initial thoughts indicate it doesn’t look right, it’s always advisable to make a 30 second phone call,” one merchant explained.
E-commerce credit card processing with Instabill
Instabill not only provides e-commerce credit card processing solutions for merchants, we’re partnered with several companies which help merchants mitigate fraud and chargebacks. Speak directly with an account manager about a high risk merchant account solution for your business at 1-800-530-2444 today.