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How to protect your online business from frauds

Published on 21 February 15
Enterprises all over the world are facing the problem of online fraud which incurs a volume of loss every year to the industry. Medium to large enterprises can afford to employ a separate team to handle these issues whereas small enterprises have to depend on a handful of employees only.

Often small scale businesses skip checking the validity of an order or perform a risk analysis. Many recent reports have revealed that small enterprises are the companies which are often summoned for charge-backs and this affects their solvency.

Below are a few inputs on how to combat e-commerce frauds-
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1. Big brands establish a full-proof infrastructure to prevent frauds and often hire an external team of experts. Many medium scale retailers too depend on outsourcing. They assign a vendor who takes care of all sort of sales transactions. That means the vendor will be responsible to check the customer data, evaluate risks, detect proxy, identity theft etc.

2. Investing in an e-commerce fraud identification tool is a wise choice if the scale of operation is medium to small. Often small firms try to manage everything by a handful of employees to reduce operational cost. These are the companies that fall victims easily. A good software tool that can evaluate every sales order for probable risk assessment is a must-buy for them. Magento App store for example has got a number of relevant tools.

3. If none of the above is in the cards, there are conventional methods to follow. The very first one is the Address Verification Service (AVS) in conjunction with the IP address. If the IP address of an order placed is close to the AVS address, geographically, it is most likely that the order is valid. If not, then you need to evaluate further. Sometimes this mismatch may occur due to a recent shift of residence.

4. Proxies pose a serious threat to the e-commerce industry. A proxy server is a virtual private network, using which fraudsters hide their true identity and location. They fill in the details of someone else which they collect from leaked or hacked data. There are a number of services available today that can block these proxies whenever they will try to log in to your site.

5. Big Data and data linking is one of the most useful methods to prevent fraud. Data linking provides you an insight about customerâs buying history and lets you find out if there is anything suspicious. It can be frequently changing credit card details, changing machine IDs, very high order velocity etc.
This blog is listed under Development & Implementations Community

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