{"id":24144,"date":"2021-11-19T11:18:52","date_gmt":"2021-11-19T11:18:52","guid":{"rendered":"https:\/\/www.webscale.com\/?post_type=blog&p=24144"},"modified":"2023-12-29T15:45:42","modified_gmt":"2023-12-29T20:45:42","slug":"top-3-ecommerce-frauds-tackle","status":"publish","type":"post","link":"https:\/\/www.webscale.com\/blog\/top-3-ecommerce-frauds-tackle\/","title":{"rendered":"Top 3 ecommerce frauds and how to tackle them"},"content":{"rendered":"

Tyler Mullen is director of marketing at Kensium.<\/span><\/em><\/p>\n

Amazon founder Jeff Bezos once said:<\/p>\n

\u201cWe see our customers as invited guests to a party, and we are the hosts. It\u2019s our job every day to make every important aspect of the customer experience a little bit better.\u201d<\/p>\n

This quote couldn\u2019t be more true when considering you want to make each customer\u2019s experience as exceptional as possible, especially when it comes to security. Customers want to know that their personal and financial information is secure and won\u2019t fall into the hands of bad actors on the internet.<\/p>\n

In a world where so much communication happens over the internet and the virtual environment is chock full of advertisements with products and services to buy, the role of online marketplaces cannot be underestimated. The impact of communication via the internet attracts criminals to take advantage of security weaknesses, as well as use scams and malware to compromise your customer\u2019s data.<\/p>\n

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How Bad Is It?<\/strong><\/p>\n

Ecommerce fraud permeates the market. An estimated $630 billion<\/a> in sales transactions occurred in 2020, and an estimated $16 billion is forecast to be lost because of fraud. When it comes to preventing fraud, every business must stay vigilant to mitigate the significant impact it can have on their revenue. Outdated legacy fraud detection and prevention methods are insufficient to match the technical abilities of today\u2019s fraudsters.<\/p>\n

As the holiday season quickly approaches, it\u2019s critical to your business to protect yourself against fraud. This means following security best practices, using security tools that leverage advanced technologies like two-factor authentication and machine learning, as well as automated chargeback management. These tools are at your disposal to fight back against hackers and there are multiple solutions that provide dynamic end-to-end payment protection that follows the customer through the payment lifecycle. Let\u2019s take a look at the top three ecommerce frauds and how you can tackle them.<\/p>\n

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Start Preparing In Advance
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\nCreating and implementing a successful anti-fraud strategy should start six months in advance of the busy holiday sales season. This way, you are ready and able to mitigate fraud risk. The first way to prevent fraud is by performing upgrades on all the platforms you use to run your ecommerce business. This means upgrading and updating your ecommerce platform, hosting platform, and ERP service. These upgrades ensure that you have the most recent installations that contain upgrades to security patches and potential bugs found in previous releases.<\/p>\n

Next, take a good hard look at your current fraud detection policies and capabilities. Ask yourself if it is time to update these policies as well. Start with the most common fraud and research the technology available that is best suited to address that specific threat. For example, machine learning-based fraud detection systems analyze customer data to identify unusual user behavior that fits the profile of known fraudulent activity. Alerts are sent to the merchant so they can take steps to shut it down. This type of fraud prevention is especially useful when it comes to \u201cfriendly fraud.\u201d<\/p>\n

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Friendly Fraud<\/strong><\/p>\n

Friendly Fraud is anything but friendly. According to Chargeback.com<\/a>, it comprises over 70% of ecommerce fraud losses. This type of fraud happens when a cardholder disputes a legitimate purchase. The tricky part is figuring out if it\u2019s an innocent mistake or a malicious attempt to steal money.<\/p>\n

One of the most common ways this scam is accomplished is when a buyer falsely claims that they did not receive their item, also known as INR. There is no hacking here, after the buyer files an INR claim, they are given the benefit of the doubt and are given a full refund or a replacement item. When this happens, they get two items for the price of one.<\/p>\n

Another way of performing Friendly Fraud is using chargeback fraud. This is when they contact their credit card company and ask for a chargeback due to the missing package. If the bank issues a chargeback, it\u2019s up to the merchant to prove that it was fraudulent in order to recoup their loss.<\/p>\n

How To Prevent Friendly Fraud
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\nFriendly fraud is extremely tricky to prevent because accusing a customer of fraud, and if it really isn\u2019t, you risk losing a customer. Here are a few best practices to follow to prevent Friendly Fraud:<\/p>\n