Fraud happens when the credit cardholder has not authorised the transaction.
As a merchant, this can get fairly costly for your business with high chargeback fees and loss of sales revenue.
There’s always a risk you’ll be vulnerable to fraudulent transactions.
But there are red flags to look out for and measures you can take to ensure it is kept to a minimum.
Check if the IP location and credit card address match up
You should watch out for IP addresses from overseas that don’t match the address on the credit card used in a payment.
You can use our Location by IP
tool to check an IP address.
Watch out for suspicious email addresses
Some email addresses can be a giveaway tipping you off you’ve received a fraudulent order.
An email address like email@example.com is a red flag.
Sometimes the person who places a fraud order will sign up for multiple accounts with similar email addresses.
Email the customer to see how they reply to question about their order.
A potential red flag is when the email bounces because it doesn’t exist or the customer does not reply back.
Keep an eye on the number of credit cards used
You can keep a log of credit cards that customers are using with their consent.
If the number of credit cards used is more than 3, it’s likely to be fraud.
Scammers will attempt many transactions using multiple credit card numbers until they find one that works. Be sure to flag these.
Restrict the number of declined transactions.
When scammers try to make fraudulent transactions, sometimes this is done via a malicious software script
where many credit card numbers are tried in succession.
The solution is to restrict the number of times a user can incorrectly enter in credit card numbers.
Ban them once they exceed that number of attempted transactions.
Watch out for orders larger than normal
To help prevent fraudulent transactions from your store, make sure to keep an eye on orders larger than normal,
unusually large quantity of international orders within a short period of time,
multiple orders from different customers shipped to the same address.
Ship your orders using tracking numbers and require signatures
A tracking number helps prove that a package was delivered.
While this may not protect your business in the case of outright criminals, it may help if you get into a dispute with a
legitimate customer who says they never received the package, but you are sure it arrived.
For expensive items, always require a signature upon delivery.