Spotting the red flags signaling the most common ecommerce scams is one of your best defenses against falling prey to the unscrupulous. Additionally, learning to recognize the characteristics of suspicious ecommerce transactions will greatly reduce the instances of fraud perpetrated against your company. It will also save you a lot of money from indefensible chargebacks, as well as damage to your reputation. Whenever a transaction involves any of the following, always subject it to a bit of extra scrutiny.
Brand New Customers
Stolen credit card numbers have a limited shelf life, so thieves try to use them as quickly as possible to get as much as they can before the number goes bad. While new customers are absolutely the lifeblood of a business, you should treat every first-time transaction with a bit of extra care because fraudsters tend to be first-time customers.
Expedited Shipping
Again, compromised cards have a definite use-by date. To counter this, criminals try to get as much product as they can into their hands as quickly as possible—with little regard for rush charges. If you’ve got somebody willing to pay the highest amount for the fastest shipping available, run that card number through every fraud filter you can access before approving it because the possibility it’s a stolen number is higher. Think of it this way: they don’t care how much shipping costs because they aren’t planning to pay for it anyway.
Extraordinarily Large Orders
Yes, you want to sell as much as you can to maximize your revenue stream, particularly if you’re just starting out with a free ecommerce store. But crooks also want to maximize theirs. If you’ve got someone placing an order for 50 70-inch OLED 4K UHD video monitors from your online electronics store, something’s probably up. Yes, they might own a hotel—this too is a definite possibility—but in all likelihood, they don’t. This scenario also includes a couple of other tells: an attempt to purchase multiples of identical items and multiple big-ticket items.
Billing and Shipping Addresses Differ
In some situations, particularly around the holidays, you might be asked to ship to an address other than the billing address. However, in most cases, people want to see what they got before they present it as a gift. If you’re getting a lot of orders in which the shipping and billing addresses are disparate, you’re probably seeing fraudulent activity. Check them out more closely. Conversely, if you’re getting a lot of orders with different card numbers asking for shipping to the same address, you’re dealing with a scammer.
International Shipping Addresses
A lot of criminal activity of this nature originates offshore, and the perpetrators want the items shipped to where they are. If the card number has a U.S. billing addresses and the buyer is asking for shipping to another country, the transaction should be analyzed a bit more carefully as it could involve a hijacked card number.
Unusual Contact Information
So, the provided email address is Imacrook@fraudsters.com? Yeah, that ought to be a red flag—OK? Seriously though, email addresses containing random assemblages of letters and numbers should always be viewed with suspicion. Ditto phone numbers seemingly too simple to be real. Training your team to investigate email addresses and phone numbers with these characteristics to determine their legitimacy will save you a lot of grief (and money).
In fact, subjecting all of these characteristics of suspicious ecommerce transactions to additional scrutiny could well be the saving grace of your business.