10 Practices To Protect Your eCommerce Business From Fraud
Monday, May 9, 2016Lauren Macdonald
Fraudulent activity on your eCommerce website can be a nightmare. Not only will it affect your company’s revenue, but it can also damage your reputation as a trusted online retailer.
In order to protect your eCommerce business from fraud, we recommend adopting the following 10 practices:
Use a reputable eCommerce platform
There are a number of well-established eCommerce platforms that have a strong reputation and offer quality risk management support. By utilizing one of these platforms you can take advantage of their fraud prevention tools and rest assured that you have risk management support if you do become a victim of fraudulent activity.
Here’s a few examples of eCommerce platforms to consider:
- 3D Cart
Keep platforms and software updated
The eCommerce platform you choose will have specialists that work to protect their software from fraudsters. As updates are released, be sure to update your software promptly in order to ensure that you are protected from potential hackers and fraudulent activity.
Double check your website security
Be sure to look over your entire website and make sure it is as secure as possible. During the checkout process, double check that all URLs stay in https. You may also want to consider regularly updating the passwords to your web server control panel and databases. If you are unsure about the security strength of your website, consider hiring a security auditor to see if they can find areas of weakness and suggest methods for tightening your website security.
Require strong passwords
Ensure that customers assign strong passwords to their accounts on your website by setting specific password requirements. For example, you may wish to require that passwords contain a combination of upper and lowercase letters, numbers, and symbols. A strong password will reduce the likelihood of hackers gaining access to an account.
Achieve and maintain PCI compliance
PCI compliance refers to achieving the Payment Card Industry’s Data Security Standard. This is a set of standards and requirements to help ensure that online merchants and their customers are protected from privacy breaches and fraud. Be sure to review the PCI Compliance Guide and ensure your website meets its requirements in order to protect your eCommerce business from fraudulent activity and avoid any fines or penalties for failure to comply.
Require credit card security codes
A credit card security code is the 3 or 4 digit number printed on the back of a credit card. This number is never printed on receipts or stored in a database so using one in a transaction process ensures that the cardholder is in physical possession of a valid credit card. Requiring security codes during purchases on your eCommerce website can be a huge help in keeping your business free from fraud.
Use tracking numbers for all orders and require signatures upon delivery
Tracking numbers can be used to help protect your eCommerce business from chargeback fraud (when a customer requests the return of funds from a merchant). Most often, customers engage in this type of fraud by claiming that a product was never delivered and that they want their money refunded.
By using tracking numbers, you can confirm whether a product was delivered to a customer and prevent this type of fraud from occurring. Requiring a signature upon delivery is another helpful way to prevent chargeback fraud.
Ensure that your staff are educated on fraud prevention
Make sure that your staff are aware of the steps they should be taking to prevent fraudulent activity, and what they should do if they expect fraud may be occurring. It is also a smart idea to create and maintain a file of past fraudulent transactions and attempts in order to learn from previous mistakes and identify areas to keep a closer eye on based on patterns and trends that may occur.
Have a restriction on the number of declined transactions allowed
Restricting the number of declined transactions that your eCommerce website will allow is another helpful tactic for preventing fraud. Occasionally, scammers will use a malicious software script where many credit card numbers are tried in succession. By restricting the number of times a user can incorrectly enter in a credit card number, it will reduce their chances of successfully committing fraud.
Keep up to date on current fraudulent schemes
Our last tip is to make sure you’re aware of the current fraud-related schemes going on that other businesses may have recently experienced. The media often picks up and reports on fraudulent schemes of larger magnitudes, so keeping your eyes and ears open for these stories is a good way to stay on top of what’s going on. By keeping yourself aware, you can find ways to prepare and strengthen your security protocols in advance so that your business does not become a victim of fraudulent activity.
What other practices have you applied in order to combat fraud on your eCommerce website? Let us know in the comments below!