Black Friday and Cyber Monday: How to Protect Your Online Store from Fraud
When it comes to holiday shopping, last year didn’t disappoint. On Black Friday alone, online sales hit a record $6.2 billion, up almost 25% compared with 2017, while Cyber Monday had projected sales of $7.9 billion. Total retail sales for the 2018 holiday shopping season were just as impressive — projected to surpass $1 trillion in the United States alone.
Given these numbers, it’s no surprise retailers are already gearing up for the 2019 holiday shopping season. But while many e-commerce retailers are focusing on having ample supplies of this year’s hottest toy or ensuring they have sufficient customer service and warehouse staff, they may not be giving equal attention to ensuring their business is protected against inevitable fraud spikes.
Understanding what risks merchants might be facing — and having a plan in place to address those risks — should be an important part of a merchant’s holiday sales strategy. Here are eight simple tips merchants can start implementing today to ensure their e-commerce fraud protection is strong enough to survive the holidays.
1. Ensure Websites and Apps Are Secure
As technology evolves, e-commerce merchants need to ensure they’re keeping up with the latest digital security solutions to protect themselves and their customers from fraudsters. Before the busy buying season hits, confirm your site uses Secure Sockets Layer authentication and security providers like Verisign, 3-D Secure and other multilayered cybersecurity approaches.
2. Adopt Verification Processes
Using verification technology that identifies fraud based on the physical and digital components of someone’s identity (like billing addresses, emails and phone numbers) can help merchants reduce their vulnerability to cybercriminals. Merchants might also consider investing in email authentication, which protects them from clicking on fake links or engaging with messages coming from fake email addresses.
3. Recognize the Signs of Account Takeover Fraud
Account takeover fraud occurs when a fraudster uses a piece of a victim’s identity (such as Social Security numbers or email addresses) to gain access to and take over a victim’s account. And once they have account access, it’s easy for fraudsters to compromise checking, savings and brokerage accounts. But if merchants can spot the warning signs — like multiple failed login attempts and logins from new devices with different IP addresses and device IDs — they can stop suspicious transactions before they do any damage.
4. Review Purchases With a High Resale Value
Topping many consumers’ shopping lists each holiday season are the latest smartphones, mobile devices and video game consoles. It’s probably no surprise that these same items top fraudsters’ lists. Thanks to the high resale value of these big-ticket items and the ease with which they can be sold on secondary markets, merchants must be mindful of these products’ increased appeal to fraudsters around the holidays. To minimize risk, retailers should carefully review high-value transactions, especially those from first-time customers.
5. Clarify Shipping and Return Policies
Around the holidays, consumers are especially mindful of costs, so it’s no surprise that more than half of consumers say free shipping and returns are important to them. That makes now a perfect time for merchants to ensure their shipping and returns policies are up-to-date, easy-to-understand, and readily visible on their websites.
And to appease last-minute shoppers, merchants should coordinate with their carriers to establish cutoff dates for delivery by Christmas Eve and Christmas Day. Once those dates are set, retailers should advertise them on websites and in social media so customers know how much time they have to get free shipping or to make the cutoff for rush shipping on last-minute gifts.
6. Add Order Tracking
Shipping orders with package tracking may cost merchants extra up front, but it can save them from customer service headaches down the line if orders don’t arrive when and where they’re supposed to. Today’s online shoppers expect to be able to track their purchases right from their mobile device, all the way from warehouse to delivery. Tracking numbers can also provide proof against false item-not-delivered chargeback requests.
7. Teach Customer Service to Identify Fraud Indicators
When fraudsters can’t circumnavigate around fraud prevention tools, they may try to find a chink in the armor by targeting a merchant’s front-line customer service representatives. After all, these reps don’t usually have fraud prevention training and they’re often under pressure to quickly handle high call volumes. It is useful to train reps how to identify common scams — such as “customers” trying to talk their way into accessing account authentication or password information or customers requesting shipping changes on approved orders (e.g., changing the delivery address, switching to a carrier suggested by the customer or upgrading from standard to expedited shipping on approved orders).
8. Update Fraud Prevention Tools
Even when merchants think they’re doing all they can to protect their business from the potentially devastating effects of fraudsters, it’s still hard to separate legitimate transactions from the fraudulent ones, reduce false declines and defend against expensive chargebacks. If your fraud prevention program you have in place now isn’t doing what you need it to, there’s no better time than now to consider making a switch.
Before the holiday shopping season begins, you’ll want to consider hiring a company that has the manpower and expertise to inspect every transaction to validate orders and eliminate fraudulent ones. Some solutions even include chargeback guarantees. With these guarantees, if the fraud prevention solution approves an order and you get a chargeback from a customer, then the solution provider, not your business, covers the entire cost.
Finding that provider can sometimes be hard. That’s why we created the free “Fraud Protection Buyers’ Guide.” In it, you’ll learn about the options available to you and outlines the questions you should be asking to find the solution that fits your needs. You’ll walk away knowing the right strategy to head into the 2019 holiday shopping season and being prepared to reduce fraud, increase sales, and decrease false declines and chargebacks.