Holiday Shopping Online- Good for Merchants and Fraudsters

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It’s the season all etailers wait for – the Holidays are upon us!

Many e-commerce companies may do 40% or more of their total year in a few short weeks. And that seasonal rush is good news – not just for the e-commerce store owners but also for fraudsters. They know that attention to individual orders may be decreased for holiday shopping online. recently interviewed our own Rey Pasinli on pointers about the season:

eCommerce experts believe that the shopping online numbers will indeed increase during the 2017 holidays and unfortunately, so will online fraud. According to Rey Pasinli, founder of Total-Apps, “Even thieves and crooks need to shop for holiday gifts. Expect online fraud to spike during the holidays!”

One of the main reasons for an extra special influx of thievery this year is that fraudsters being forced to be more creative, due to innovations in identity protection.

The article goes on to suggest:

“Merchants should think of fraud scrubbing as if they were a medieval castle,” suggests Pasinli. “Castles had multiple layers of defense designed to thwart specific threats. Moats, draw bridges, high castle walls and the troops all combined to provide a layered defense to protect the treasure inside.”

Here are some of the protective layers he’s talking about:

1. Understand Your Risk

As you lay out your fraud protection plan, you need to first understand how attractive your business is going to be to fraudsters. They won’t want items of small monetary value, but they will want luxury items.

If you sell children’s Bibles, for example, you probably won’t need to do too much fraud scrubbing. However, if you’re selling the next iPhone 10, you’re likely going to be a target and need to pull out all the stops.

2. Do a Volume and Velocity Check

If, for example, someone just ordered $25,000 worth of dresses online over a period of three days, your red flag should go up. That’s far too many dresses for one household, no matter how many fashionistas might be living there!

“Volume and velocity checks are two of the most powerful tools against fraudsters,” says Pasinli. “Volume looks at the number of transactions and dollar amounts coming from a single source. $25K in orders from a single card is highly suspect and should be further validated. Conversely, velocity examines how many times a specific data point repeatedly appears. For example, 20 different credit cards in quick sequence all originating from the same IP address is a clear indication of fraud.”

Too many businesses don’t do this easy step. Don’t be one of them.

Another simple step is to ensure your gateway is set to do an address verification and a cvv code check which further reduces risk.

All of these are simple steps any merchant can do to keep tabs on fraud this holiday shopping online season. If you have a bigger problem, there are firms that can help. Total Apps has partnered with Quant RM, a full-service fraud-fighting firm, that can manage chargebacks and fraud for any merchant. Quant RM uses top tools and its own proprietary system to reduce fraud significantly. If your company is small and you’re not quite ready yet for a full-service firm, DIY’ers can opt for tools like ThreatMetrix or Kount but be aware that those require rule writing skills that may be beyond the average etailer.

This Holiday season take a moment to review these simple steps to reduce any post-holiday letdown from chargebacks due to fraud.  You’ll be glad you did!