There are 28 days until Black Friday, 37 days until Hanukkah and 60 days until Christmas.
E-commerce merchants should protect their online credit card processing year round, but now is the time to prepare for the 2018 holidays and the inevitable fraud attempts that go with it. In the current climate headed into the 2018 shopping madness, merchants should have one goal: Learn whatever they can from 2017.
Fraud rates are as high as ever, with no silver bullet in sight, leaving e-commerce merchants to fend for themselves. In the current climate, we’ve seen two approaches make the best solution: education and proactivity, both of which merchants can find in abundance on our website.
Our goal is to get merchants processing credit card transactions and keep them processing. Thus, we empower them with content regarding the latest trends in fraud tactics (nowadays, friendly fraud and account takeover are the crimes du jour) and the best strategy to mitigate.
Where to begin?
What can you learn from last year?
Merchants can benefit significantly from reviewing last year’s data. Thus, allow us to float a few trigger questions:
Are there certain products that were charged back last year?
Merchants can begin by identifying which products were charged back last season, the reason codes behind them and if any patterns are evident:
- Was there a certain country/region they came from?
- We’re some products charged back more than others?
- Was there a particular period or window when products were charged back?
- How many orders did you decline and why?
- Note and set aside strange orders that raised red flags.
Machine learning, AI settings: It’s OK to loosen up for now
Recently we blogged about how false declines — when a merchant declines a legitimate transaction due to signs of fraud — can be more damaging than chargebacks. Many merchants are averse to leniency on their machine learning and AI settings when vetting possible fraudulent orders, understandably. There is a time, however, to loosen restrictions on certain types of transactions — the holidays.
- Shipping/billing mismatch: Merchants are advised to lift restrictions on transactions in which the shipping and billing addresses differ. This is the time of year when consumers purchase and ship to a different addresses. For example, many consumers ship gifts to their workplaces (to keep them in seclusion) while many purchase and ship to loved ones in different states. In the months of November and December, such practices are common.
- IP address/shipping mismatch: While an IP/shipping address mismatch may signal stolen credit card information, this is a similar situation to a shipping/billing mismatch. An example of such is a university student or someone living abroad, buying a gift online using a proxy server and shipping home or to another location. Again, for this time of year, it’s not out of the ordinary.
- Shopping globally to save money: Merchants should proceed with caution with this one. Consumers worldwide sometimes online shop on websites in different countries because products are cheaper — a common practice in Europe and the U.K., where countries are geographically close. Recently, we became privy to the revelation that women’s makeup is far less expensive in Germany than it is in Russia. Knowing subtle and niche facts about Russian women’s preference for purchasing makeup from an online store based in Germany from a consumer in Asia attempting to purchase, for example, a gas grill from a U.S. website can be the difference between a false decline, a sale or identifying fraud.
Final bid of advice for online credit card processing: Find ways to approve transactions
Many merchants approach the vetting process of transactions with an eye out to catch and halt the fraudulent ones. We recommend a different approach: to find ways to approve transactions with the criteria we listed above.
For online credit card processing merchants, the time for adjusting settings heading into the 2018 online shopping season is now — not the week before Thanksgiving.
What are some of the strategy and criteria you use to vet transactions? Leave us a comment below.