| As the longtime owner of a couple of popular online | | | | search phrase they used, or the last page they came |
| stores, I've learned the hard way - through experience | | | | from. Thieves tend to search on phrases like |
| - that online criminals are constantly trying to take | | | | "international shipping" or "overnight delivery" instead of |
| advantage of the ease in online shipping to commit | | | | the category or keywords products are advertised |
| fraud. | | | | under. |
| For consumers whose credit cards are used in online | | | | 4) Check the IP address. And IP (Internet Protocol) |
| fraud, there's no loss. The bogus charges are almost | | | | address is a unique numerical identifier that much like a |
| always refunded. But for online retailers who get | | | | house address. In this case, it identifies the computer |
| conned into processing the orders, there is no relief. | | | | network that the order came from. Your oder |
| If it's fraud, you get a chargeback. You're out the order, | | | | processing software should also show you the IP |
| the merchandise you shipped and the online fees | | | | address that the order was sent from. Check it out. |
| charged by your credit card processor. | | | | On my Yahoo! Stores, all I have to do is click the |
| Those chargebacks are never pleasant. In the early | | | | address and it does a trace, identifying the network |
| days, I had my share. But after plenty of grumbling, I | | | | location. If it's overseas, shipping to the U.S., I consider it |
| decided to consider them what financial expert and | | | | fraud unless I can call the phone number and talk to a |
| radio talk show host Dave Ramsey calls a "stupid tax." | | | | real customer. |
| Then, I set my mind to learn from them so I wouldn't | | | | 5) Beware of mail forwarding operations and shipping |
| keep paying the "stupid tax." | | | | to Post Office Boxes. Watch out for mail processing |
| I started by making a list of every chargeback I was | | | | locations. Many thieves order your items from |
| hit with over a 12-month period. I rigorously examined | | | | overseas and have them shipped to maildrops. Often, |
| them, looking for patterns and similarities. As a result, I | | | | instead of a box number, these locations can be |
| instituted some security procedures and checklists that | | | | spotted by having a "suite" number under the address |
| have worked well in greatly reducing the fraud losses | | | | line. Miami and Houston have a bunch of maildrops |
| from my stores. | | | | serving South America. Seattle and Los Angeles have |
| I still get stung, but very rarely these days. | | | | them for Asia. New Your City handles Africa and |
| The one single step that has most helped reduce | | | | Eastern Europe. If suspicious, run the customer |
| fraudulent orders for me and my stores is to eliminate | | | | address through Google. Often you'll see it listed to a |
| shipping to any location other than North America. I | | | | service for mail forwarding company. |
| know, that's a drastic step. But while I no doubt do | | | | 6) Be suspicious if the shipping address and the billing |
| indeed do lose some legitimate business from | | | | address on the order are different. At the very least, |
| overseas customers, it has been my experience that | | | | whenever this happens, don't process the order unless |
| most fraud originates overseas. | | | | you call the customer to confirm the order. Some |
| And my experience is not unusual. Once recent study I | | | | stores even make it a policy to ship only to the billing |
| have seen, from Cybersource, notes that fraud rates | | | | address listed for the credit card. I get a lot of orders |
| on overseas orders are four times the level of North | | | | from parents buying my products for their kids who |
| American orders. Thus, not allowing orders from | | | | are away at college so that's not a policy we impose. |
| places other than the U.S. and Canada helps eliminate | | | | But we always call when the addresses are different. |
| many of the problems. | | | | 7) Always expect fraud when you get multiple orders |
| Still, almost every day, some thief still tries to get | | | | submitted from the same customer in sequence, using |
| through. Most of them are from criminals trying to see | | | | the same credit card, or the same ship-to address. |
| if a credit card number they have is still good. They'll | | | | 8) Beware of unusually large orders. You know from |
| place an order and provide a ship-to address in the | | | | your oder processing reports,what the average |
| U.S. | | | | customer buys. You know what is a big order. Is it |
| Below are my top 10 suggestions for catching the | | | | over $250? Over $500? Over $1,000? When the |
| fraud before you complete the transaction. As many | | | | norms are exceeded you should carefully examine the |
| of these flags as you have on an order, the more apt | | | | order. |
| it is bogus: | | | | 9) Be skeptical when you get orders with multiple |
| 1) Shipping FedEx overnight is a frequent marker. The | | | | quantities of the same product. It is common for |
| thief figures the merchant will move so fast to process | | | | fraudulent orders to be large quantities of a single item. |
| the order that there won't be too much scrutiny. A | | | | 10) Look for typos, grammar and punctuation errors. |
| dead give away and cause for you to seriously | | | | Serious customers make mistakes in filling our your |
| question the oder is when the overnight shipping costs | | | | oder forms. But not nearly as often as thieves do. |
| approximate the item's cost. | | | | If I had to boil everything down to a single piece of |
| 2) Look at the phone number and e-mail address | | | | advice, it would be this: When in doubt, try to reach the |
| provided by the customer. Does the area code match | | | | customer. If the phone is disconnected, mark it as |
| the city and state of the customer? If the customer | | | | fraud. If there is no answer, leave a message on the |
| uses a free Yahoo!, Hotmail, or Google account, does it | | | | answering machine. Then send an e-mail. If after 24 |
| correspond to the customer's name? Thieves always | | | | hours the e-mail and the call are not returned, do not |
| use these free accounts. So, of course, do many | | | | process. |
| genuine customers. But an e-mail to a domain not | | | | These are just some of the fraud indicators and |
| associated with free web-based accounts, with a | | | | precautions I've learned over the years. They are by |
| username (the part before the "@" sign) that matches | | | | no means exhaustive. But I have instructed all my |
| the customer, is usually good. | | | | employees to filter our orders through skeptical eyes. |
| 3) If your store has referrer info on orders, like Yahoo! | | | | As a result, we've diminished our chargebacks to only |
| Stores provides, for example, examine how the | | | | two or three cases a year. |
| customer found you. My store's order info lists the | | | | |