Risky Business: When Fraud Jeopardizes your Ecommerce Efforts
Ask any executive or analyst in a given sector of commerce, and you’ll hear the same answer with respect to fraud. It’s one of the most nefarious and damaging elements poised to put a dent in both revenues, trust, and even security.
With ecommerce merchants, fraud has found a ripe target given its virtual presence requiring online payments and strictly virtual interactions with customers. Fraudulent activity—both attempted and failed, and successful—has skyrocket in the last few years, hitting large ecommerce retailers the hardest, with a $10 million annual revenue loss. Mid-size merchants averaged 249 fraud attempts per month in 2018, and are on track to far exceed that as the platform grows and bad actors proliferate.
What can you do? No matter how grand or minimal your business is, you can track both payment and channel fraud. Fraud detection solutions are available for both no-cost and minimal-cost investments. Entities that specialize in online commerce fraud can assess your unique risks and advise you on how to minimize them.
Target them back
Using targeted technology, you may pinpoint where your weaknesses lie and address them immediately. While there is no foolproof solution to fraud challenges, minimizing them will help your bottom line.
Some important aspects of online commerce fraud include:
Friendly/1st Party
Third-party/Synthetic ID
Fraudulent requests for refund/return
Lost or stolen merchandise
Third-party account takeover
Each of these is addressed in detail through a study by LexisNexis Risk Solutions, a formidable entity with a vast, expansive body of data and knowledge.
It’s not all nouveau. Some low-tech fraud works its way into ecommerce through changing of addresses that impacts credit card and personal data; post-purchase shipping fraud (criminals purchasing goods fraudulently for purposes of resale); and impersonation, where a customer pretends to be someone else in a phone or email interaction. It’s critical to verify the identify of anyone you’re working with.
Since fraud is an unfortunate, yet permanent, reality in worldwide commerce and other sectors, it’s imperative that you develop a strategy for preventive business health. The last thing you need after investing time and energy (and money!) into a thriving or struggling online business is to fall victim to a scammer who will reduce not only your revenues, but your trust in ecommerce overall.
Curious about the best specific strategy for your online store? Download a free guide from Kyriba on how to mitigate the risk of payments fraud. It could just save your business.