For any ecommerce business, accepting all types of major credit cards and electronic checks is a necessary method of customer payment. Having said that, when business owners decide to accept electronic payments, they must also make an allowance for the probable cost of fraud. Various studies conducted over the years have shown both online and traditional merchants have lost billions of their hard earned money in fraudulent transactions. But you don’t have to worry at all; there are many ecommerce fraud prevention techniques out there for recognizing and averting fraudulent transactions.
Fraud can hit you in many ways. Sometimes end up processing order of a fraudulent customer, and by the time you find out that the credit card used for the transaction was stolen, you have already shipped the item. Fraudulent orders more often than not result in a customer credit card charge back to your business. Unluckily, it is too late to do anything and you have lost your product. You have also lost the revenue from the sale and to make matters worse; you will get a charge back fee from your credit card processor.
There is a crying need to recognize and prevent a fraudulent order before delivering your product. Luckily for the merchant, there are quite a few processes that can be put into practice to decrease and eradicate credit card fraud.
5 eCommerce Fraud Prevention Techniques!
Card Verification (CVV)!
CVV is the three-digit code (four digits for American Express) that you find on the back of a credit card. CVV is entered at the point of sale. The CVV code is verified by the card issuing bank when the credit card sale is being processed. In case, you don’t receive a CVV match you must consider declining the transaction. It is necessary that online merchants must make CVV a required field.
Use a Threshold Management Service!
Threshold management, as one of the major ecommerce fraud prevention tools, is all about setting parameters for the transactions that merchant will accept. For instance, transactions can be screened based on the sum of money charged for each transaction, transaction frequency, the number of transactions charged, average user ticket, and more. Transactions that are marked as a possible fraudulent transaction will need additional review by the merchant. These services are generally available an add-on service.
Inspect Orders from Free email accounts!
Thieves and fraudsters like to hide. Using a free email account is one of the easiest ways to conceal the identity of a thief. The majority of fraudulent transactions make use of a free email service. Well, it doesn’t mean that merchants should decline all transactions from a free email service. Nevertheless, you may want to provide those orders with more scrutiny.
Use a PCI Compliant Data Storage Service!
Merchants who have a necessity to store the client’s credit card data should utilize a PCI Compliant Data Storage Service. A PCI Compliant Data Storage Service enables merchants to transmit and store the client’s payment information in a Level 1 PCI certified data office. When the client record has been safely transmitted and stored the dealer would then be able to start exchanges remotely without getting to a credit card or electronic check information specifically. This procedure is practiced without the shipper storing the client’s payment information in their local database or payment application.
Examine orders with a different Ship to address than Bill to address!
It is quite possible that a thief with the stolen credit card might have the owner’s zip code and billing address. If that is the case, he (or she) will receive a CVV and AVS match on their order. Though, in order to receive your product, they will ask for the order to be shipped to another address. Merchants must review all the orders with a different bill to and ship to address. In case, the ship to address is some other country, you need to pay even more attention to the order.
Exposing your business to fraudulent transactions and high charge back ratios could cause you to lose your merchant account. However, all these ecommerce fraud prevention tools can be implemented for ecommerce fraud prevention and that too without any additional costs.