Avoiding Retail Fraud 2nd Degree – Why eCommerce Business Owners Need to Wake Up

Although eCommerce sales are soaring, the constant threat of 2^nd degree retail fraud continues to spoil the party for countless eCommerce vendors. Even though many vendors are actively investing in eCommerce fraud prevention measures, the global eCommerce industry keeps losing billions of dollars every year.

Understanding the Nature of Modern-Day eCommerce Fraud

eCommerce fraud is quite self-explanatory. Scammers cheat online vendors in various ways to steal money and customer data. The problem with eCommerce fraud is that it keeps evolving. Vendors feel helpless in this changing environment of eCommerce fraudsters. If vendors use special encryption software on their platforms, the scammers start attacking their site with bots. If they ask their customers to use difficult passwords, the scammers use guessing programs to generate millions of password variations – this never-ending cycle hurts small-scale eCommerce vendors the worst. Even the eCommerce businesses that use the latest technologies take significant hits every year.

Why is the Legal System Failing?

Although countless state and local laws treat identity theft as major misdemeanors of the second degree, card not present (CNP) fraud has continued to grow. Fraudsters steal credit card information to target vulnerable eCommerce vendors. If their repeated attempts to order items using stolen information succeed, the vendors have to undertake all the losses. Many online store owners don’t even realize they’re opening their doors to these types of fraud threats every day by not using secure payment methods and the most advanced fraud prevention software tools.  

Fighting Back 

While there are no guaranteed solutions to keeping these ever-evolving fraudsters away from eCommerce platforms, there are some steps that online vendors can take to instantly identify fraud threats and protect the financial information of their customers. These steps include -

Teaming Up with the Best Third-Party Payment Processors (TPPs)

Third-party payment processors oversee crucial aspects of every online transaction. They also charge the vendors and shoppers for their services. Hence, eCommerce vendors should expect nothing but the best security standards from their TPPs. They must avoid partnering with TPPs that have been compromised in the past. Often, hackers use the data they have stolen in the past to conjure up new forms of attack.

Using AVS or CVV

Using Address Verification Services (AVS) is a good way of avoiding card not present fraud. These services automatically detect discrepancies in the billing addresses of shoppers. If the billing address doesn’t match the billing address that the credit card company has, AVS systems notify vendors about the issue. Similarly, asking customers for their Credit Code Verification (CVV), which is a security code printed on all credit cards, ensures that the person ordering the products/services is actually in possession of the credit card (i.e., it is not a hacker who just has access to stolen credit card information).

Using the Latest Fraud Protection Software

The latest 2nd degree retail fraud prevention software comes with AI-powered tools that constantly update and evolve based on the most common security threats. These software tools detect high-risk transactions by tracking the shoppers’ IP address, online activities, etc.

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Created on Jan 16th 2021 00:41. Viewed 367 times.

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