New Fraud Prevention Tips for Online Retailers
Today I thought I’d share some new fraud prevention tips that can help ensure you’re dealing with legitimate customers instead of unscrupulous fraudsters out to slide one past you. It’s no secret that eCommerce is littered with these so-called consumers whose only intent is to prey on the vulnerable retailer. Here are some thoughts to help keep you safe.
Pay attention to your customer’s IP address. Checking your ordering customers IP addresses, when available, is one of the best ways to ensure their legitimacy. An IP address is a unique network identifier issued by an Internet Service Provider (ISP) to a user’s computer every time they’re logged on to the Internet. It acts as a virtual thumbprint of a user’s activity. If you are able to see the IP, you can quickly crosscheck it with an IP recognition site like www.WhoIs,net, www.IPlookup.net, or www.WhoIs.DomainTools.com.
For example, if you see a customer with billing info in Florida but their IP address traces to Nairobi, Kenya, that should prompt you to maybe look a bit closer at the transaction. Note: If you sell on eBay, you will not be able to find your buyers IP addresses, but if you own and operate your own website, this information should readably be available. Check with your webmaster or website service provider for more information on where to go to find your ordering customers IP addresses.
Look at the structure of email addresses. Free anonymous email services — like Gmail and Hotmail — are almost untraceable. Because of this lack of transparency, these types of free email domains have a high potential to be used by fraudsters. But these anonymous email domains are popular and a lot of legitimate customers use them. Just keep in mind that while the use of a free email domain is not a red flag in itself, it should be considered as an indicator. Take an extra moment to make sure you’re comfortable with your customer’s order before fulfilling an order.
Carefully review your customer’s physical address. Compare their IP address against the billing address. If there’s a mismatch, you should conduct additional verifications until you are comfortable with the transaction. Also consider the high risk-uses of Post Office boxes and mail forwarding services. The anonymous nature of these services makes them popular tools for eCommerce fraudsters. If you have questions about where you’re shipping a product, simply Google the information provided. You’ll be surprise by how much you can learn about your buyer or location through a simple Google search.
If you’re still uncomfortable with the transaction after your order review process, don’t be afraid to pick up the phone and give your customer a call. A simple order verification phone call has the potential to save your business thousands of dollars and is the most effect fraud-prevention technique available. This also builds confidence with your legitimate customers by showing that you are a business that can be trusted.
eCommerce fraud isn’t going away any time soon. But it can be managed with just a little effort on your part. By understanding your customer and implementing security measures such as the ones I’ve suggested above, your online business will realize greater profits through the systematic reduction of fraud risks from your customers.
