In a previous article, we discussed how a data breach can cause many unpleasant ramifications. We also reviewed some of the ways to prevent those ramifications; having data stolen by unauthorized parties is never a good thing, but you can take steps to protect your data better and prevent this kind of breach from happening.
For ecommerce sites, however, protecting the customers’ personal information and other sensitive data alone isn’t enough. There is another part to the security equation, and that is fraud. It is not uncommon for hackers to make purchases using fraudulent means such as a stolen credit card, but how can this risk be mitigated?
Understand the Threats
Before you can start working on solutions to prevent fraud, and eventually chargebacks, you need to take some time to fully understand the threats. Fraud is not limited to identity theft alone. There are actually multiple types of fraud that threaten your ecommerce site.
Some customers may use their legitimate credit card, but then file for a chargeback by claiming that their identity was stolen. This is known as the chargeback fraud. Other times you may have to deal with clean fraud where a cybercriminal uses the stolen credit card in such a way that detection is not always possible.
The more you understand the threats, the more solutions you can find as you formulate the best policies and strategies to prevent fraud and chargebacks. It is a key first step to take and one that will save you a lot of trouble in the future.
Implement Prevention Measures
Now that you know the potential threats you face, you can start formulating ways to prevent fraud from happening in the first place. First, you need a set of fraud prevention policies. This may include requiring a verified identification and refusing to sell to customers that trigger red flags as they make their purchases.
Next, you want to implement those policies in a way that doesn’t hurt the customer experience. Identity verification, for example, can now be done without requiring customers to enter sensitive information such as their Social Security Number. You can use the service offered on cognitohq.com which allows you to better verify customers’ identity using an API which pulls in the customer data for you.
At the same time, you want to go one or two steps further. Being PCI-compliant is a good example, and so is training employees about information security and how to spot potentially fraudulent orders.
Bump Up Monitoring
Your secret weapon to preventing fraud is constant and detailed monitoring. The earlier you can spot signs of fraudulent activities, the better you will be at avoiding fraud and chargebacks. Thankfully, you now have monitoring suites, plugins for ecommerce platforms, and other tools to help you review transactions effectively and efficiently.
Don’t forget to cover the basics too. Make sure your software and apps are kept up to date and that you do a thorough evaluation periodically. It is often the simplest approach that prevents the biggest losses.
Fraud and chargebacks are issues ecommerce sites will always face. It is virtually impossible to eliminate them completely. With the tips and strategies that we have covered in this article, however, you can keep fraud at minimum and spot it early in the purchase process.