Online Fraud: How you can protect your online store, and customers this holiday season (and beyond)
The holiday season is usually a significant period for many business owners. This year in particular has seen outstanding growth in e-commerce. According to Sleeknote’s online shopping statistics, there are 2.05 Billion Online Shoppers in 2020 alone, with sales estimated to reach $4.2 Trillion by the end of 2020.
Unfortunately, it’s also during the holiday period that businesses are more likely to experience a significant increase in online shopping fraud, and if your business is not well protected against fraudsters, you may end up with higher costs associated with fraud losses.
Understanding the different types of fraud and what you can do in case your brand has been targeted, will help you react in a swift and professional manner to stop any harmful activities on your customers and your business.
Types of E-Commerce Fraud
1. Account takeover fraud / Phishing: this is a type of social engineering attack that involves using stolen identification data such as login details and credit card numbers of an unsuspecting user for unauthorized purchases or stealing funds.
2. Payment fraud: this occurs when a purchase is made with a stolen credit card and the unsuspecting customer’s information is used to shop online.
3. Chargeback fraud: a chargeback is a demand that a credit card provider makes to a retailer to refund a fraudulent or disputed transaction. This type of fraud results in the payment processor demanding that the retailer refund the purchase amount to the issuing bank. When a bank demands a chargeback, the online salesperson is responsible for refunding the purchase. (bigcommerce.com)
Steps to Help Prevent E-Commerce Fraud
1. Use Verification technology to protect your users: use a system that generates only unique one-time passwords or push notifications — a great marketing tool for anyone with a mobile app to help you stay in contact with your users, sent via SMS, voice, or email. However, you want to make the verification process as simple as possible
2. Authenticate your customers’ transactions: it is your responsibility as a business owner to monitor all transactions as they come through, you should develop a process where specific security codes/tokens can be sent via SMS, voice, or instant messaging channels like WhatsApp to your customers, to validate all transactions and ensure that the orders are legitimate. This is to ensure every transaction is authorized to protect. You can even use a trusted payment provider to ensure authentication for your business.
3. Refrain from collecting too much (unnecessary) sensitive customer data: collecting very little and only needed customer data is one way to protect your online store and customers in the event of a data breach or hack. Collect just enough information needed to complete a transaction and deliver a product.
4. Conduct security audits by ensuring your Software are up to dates: backing up your online store as often as possible, scanning your website regularly for malware¸ encrypting communication between your store, customers, and suppliers and other key protective measures are ways you can prevent hackers from exploiting any weaknesses
The sad truth is, fraudsters will be getting more sophisticated in their methods as the growth in e-commerce stores increases, equipping yourself as a business owner with the right knowledge to detect and fight back these attacks should be at the top list of priorities.
Cecilia Abegunde
Digital Support Termii Inc.
