Sophisticated fraudsters increasingly bypass traditional defenses through tactics such as redirecting shipments, using malware-controlled botnets, exploiting click-and-collect pickups, and abusing weaknesses in alternative payment options. Basic controls like matching names and addresses or checking security codes are no longer enough on their own. A comprehensive fraud management strategy that layers IP and device analysis, geolocation, biometrics, and human review through a managed services solution helps merchants approve more legitimate sales while stopping fraud.
Running a business is expensive, and e-commerce merchants in particular need to watch their bottom line. Too often, fraud management solutions are viewed as an unnecessary expense. After all, merchants are confident they know what fraud looks like and how to stop it.
But the numbers tell a different story:
To keep up with evolving fraud tactics, online retailers must have the solutions in place to spot and prevent fraud before it impacts their sales and profits. Fraudsters never pass up an opportunity to commit fraud, so merchants should never miss an opportunity to proactively defend themselves and their customers against online threats.
Fraudsters are clever, there’s no doubt about it. And with the increasing availability of stolen consumer data, they’re increasingly brazen in their attempts to breach typical e-commerce security solutions.
Several recent cases of online credit card fraud underscore just how hard these innovative thieves are to catch:
Luckily, increased fraud exposure doesn’t have to translate to increased financial losses. Although no fraud protection strategy ever protects a business completely from savvy fraudsters, proactively implementing the right solution helps dramatically.
But online merchants can’t become complacent. Implementing one solution often simply causes fraudsters to probe for weaknesses in other areas. Fighting fraud is a 24/7/365 business.
This means merchants can no longer rely on traditional fraud prevention methods, like matching names and addresses, using AVS controls, and requiring card security codes. If merchants don’t look beyond the superficial details for the broader patterns at play, they’ll miss key patterns and risk approving fraudulent transactions.
Instead, a smarter approach is to implement a comprehensive fraud management strategy that includes such proactive measures as:
A managed services solution is perfect for this detail-oriented approach. It not only stops fraudulent transactions before they’re processed, it also saves retailers from tens of thousands of dollars in losses and builds customer trust.
With a managed services solution, e-commerce merchants effectively hire a team of experts who work around the clock, using precision screening techniques to review questionable transactions in lieu of automated denials. This sophisticated approach ensures merchants can approve more legitimate sales and retain more customers over the long term, while still protecting themselves from fraud.
Fraudsters are always looking for an easy target, and e-commerce is their bullseye. Don’t let your online business be the next victim.
For more insight into the advantages of managed services, download our new eBook, “Is a Fraud Managed Services Solution Right for Your Business?”
Thieves call a shipping company, pose as the merchant, and request a change to the delivery address, often to a freight forwarder. Once the package is sent to the new address it is never seen again, and the merchant faces an expensive chargeback when the legitimate customer reports the package never arrived.
Customers place an order online and pick it up at a brick-and-mortar store, but many merchants do not require the customer to present the credit card used or even an ID. Fraudsters exploit this lapse by using stolen data to buy high-value goods online and safely picking them up in store.
Methods like matching names and addresses, using AVS controls, and requiring card security codes only check superficial details. If merchants do not look beyond these for broader patterns, they will miss key signals and risk approving fraudulent transactions.
Effective measures include checking order IP addresses and device IDs, using IP geolocation and real-time transaction tracking and customer profile databases, requiring challenge questions, establishing biometric identifiers like fingerprint or facial recognition, and sending one-time passwords to authenticate transactions.
Cybercriminals launch malware-controlled botnets to harvest sensitive banking and financial data from infected devices. They then use that data to quickly make fraudulent purchases across multiple retailers.
A managed services solution stops fraudulent transactions before they are processed and effectively gives merchants a team of experts working around the clock. Using precision screening instead of automated denials, this approach helps approve more legitimate sales and retain more customers over time.