How to Detect and Prevent Fraudulent Online Orders

As a business owner, you are likely aware of the many risks that come with running an online operation. One of the dangers that can be difficult to detect and prevent is fraudulent online activity. Here at PayHawk, we are super protective over our clients’ safety and always take extra steps to make sure our integrated payment processing solutions cover all the bases for keeping them safe from fraud – which in turn helps them to avoid chargebacks and other costly fees.
In this blog post, we will discuss some best practices for payment fraud detection and prevention and explain how using the right payment processing system can make all the difference. By being proactive in safeguarding your business against e-commerce fraud, you can minimize the chances of losing money to scammers. Thank you for reading!

What is e-commerce fraud?

E-commerce fraud is a type of fraud that occurs when criminals use the internet to illegally obtain money or goods. There are many different ways that e-commerce fraud can be carried out, but some of the most common methods include phishing scams, credit card fraud, and identity theft. In many cases, e-commerce fraud is carried out by criminal organizations that target large numbers of people in order to maximize their profits. However, individuals can also be victims of e-commerce fraud. For example, if you receive an email that appears to be from a legitimate website but is actually a phishing scam, you may be tricked into giving your personal information or financial details to the criminals. E-commerce fraud can have serious consequences for both businesses and individuals. Therefore, it is important to be aware of the risks and take steps to protect yourself from becoming a victim.

Learn how PayHawk can help you with e-commerce fraud.

How to detect fraudulent online orders

As an eCommerce business owner, it’s important to be aware of the various types of fraud that can occur so that you can help protect your business from unnecessary loss. Here are the three major types of e-commerce fraud and how to detect fraud in online transactions.

Chargeback Fraud

The most common type of fraud is chargeback fraud which occurs when a customer claims to have not received their purchase. This can be tricky to detect, as you will need to review the customer’s order history and contact information.
Credit card chargebacks are a pain! Not only do they cost you the original sale, but you’re also hit with various fees from your bank or processor. And if the chargeback is deemed to be fraudulent, you could be on the hook for even more money. So how can you avoid being a victim of chargeback fraud?
There are a few things to look out for. First, check the billing descriptor on your statement. If you see something that you don’t recognize, that’s a red flag. Second, keep an eye on your account activity and look for any unauthorized charges. Lastly, if you get a call from someone claiming to be from your bank or credit card company, do not give them any personal information. If you suspect that you’ve been a victim of chargeback fraud, contact your bank or credit card company immediately.

Friendly Fraud

Another type of fraud is friendly fraud, which occurs when a customer makes a purchase and then cancels it after receiving the product. This can be detected by monitoring your cancellation rate and comparing it to your average order value. If you see a significant increase in cancellations, this may be an indication of friendly fraud.

Identity Theft Fraud

Identity theft fraud occurs when a customer uses someone else’s personal information to make a purchase. This can be detected by monitoring your account activity for any suspicious activity. If you suspect that someone has used your account without your permission, you should contact your bank or credit card company immediately.

Experiencing Fraud Orders? We Can Help!

PayHawk is a payment processing company that can help protect you and your business from e-commerce fraud. We offer a variety of services to our customers, including chargeback prevention, real-time transaction monitoring, and more. Our team is dedicated to providing the best possible service to our clients, so contact us today to get started!

How to prevent fraudulent online orders

There are a number of things you can do to help prevent fraud at your business which will in turn help you prevent costly chargebacks and other pesky fees. Here they are, in order of importance:

1. Make sure your website is using SSL

One of the most important is to make sure that your website is using SSL (Secure Sockets Layer) encryption. SSL helps to ensure that sensitive data, such as credit card numbers and login credentials, is protected from being intercepted by malicious third parties. In addition, you should also consider implementing fraud detection tools, such as IP blocking and velocity checks. By taking these precautions, you can help to safeguard your business against e-commerce fraud.

 2. Use a secure payment gateway that is PCI compliant

Equally as important as having a secure website is using a PCI payment gateway. This is a payment system that is in compliance with the Payment Card Industry (PCI). PayHawk is PCI compliant. This means that our payment processing solution abides by a set of security standards that were developed specifically to protect card information during and after a financial transaction

3. Teach your customers how to stay safe when ordering online

Educate your customers about the importance of safe online ordering. Tell them you use a PCI-compliant gateway and what that means for them. You can even show them firsthand how your site is secure. The way you do this is by having them pull up your URL. When a website is using a secure connection the URL will start with “https://.” They will also see a padlock icon next to the URL. This indicates that the website is using SSL, which means that your information is encrypted.
Another thing your customer can look for, to be sure your site is secure, is a green bar. This means that the site has an extended validation certificate, which means that it’s been vetted by a trusted third party. Finally, you can have them check your site’s privacy policy, so that they can see how you plan to use their information.
All of these things will help your customers to gain trust in you. By noting you are a safe company to purchase from, they can feel comfortable entering their sensitive information into your site and will come back to make purchases from you time and again.

4. Train your employees on how to detect and prevent e-commerce fraud

When you are selling goods and services online, it’s important to train your employees on how to detect and prevent fraud – especially before chargebacks occur and additional fees pile atop! Preventing e-commerce fraud is essential to protecting your business – and your customers. Take the time to train your employees right.

PayHawk will keep you safe and secure!

At PayHawk, we want to make sure our merchants are armed with the best possible tools to keep their businesses safe from online criminals. We hope this article has helped to give you a better understanding of how to prevent fraud online orders on e-commerce website. If you have any questions or would like more information on our PCI-compliant, integrated payment processing services, please don’t hesitate to contact us. You’ll find that the pricing for our solution is competitive and that our customer support goes above and beyond. We’re always here to help!

Request a Free Statement Analysis 

We offer free statement analysis to help you find any springing leaks in your financial motorboat and where you could be saving money with your merchant service offerings. We take a close look at your current payment processing setup and make recommendations based on your specific business requirements. Contact us today to get started!

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