Many retailers adopting eCommerce build strategies around marketing, merchandising, and maintenance. But what most retailers miss is the protection and prevention of eCommerce fraud. While many providers will support different areas of your store’s protection, it isn’t always comprehensive. If you are a retailer new to furniture eCommerce websites and want to learn about the common types of ecommerce fraud, this article is for you.
What is eCommerce Fraud
eCommerce fraud is any type of scam or fraud that takes place using stolen information to make a transaction on a furniture website platform. Fraud is not unusual to encounter in the brick and mortar store. But prevention and correction methods are practiced and effective.
What makes eCommerce fraud dangerous is the different types of fraud that can occur—many before the retailer takes notice. That’s why we’re going to cover some of the most common types of eCommerce fraud and talk about how your website platform or your payment gateway can prevent or resolve these cases.
Payment fraud goes by many names. It’s a classic fraud by any name. In fact, payment fraud is one of the most common forms of eCommerce fraud. Because it can happen by novice or unsophisticated fraudsters. And because of its prevalence, the classic fraud is one that most retailers look for and anticipate.
Credit card information is sensitive but many shoppers are still not safeguarding it from fraud. These unsophisticated fraudsters purchase stolen credit card information on the dark web or hack into vulnerable systems to obtain card information. They use the credit card information to make a purchase and often use IP blockers to disguise the fraud transaction.
But payment fraud spirals into other common types of eCommerce fraud that impact your online retail store:
- Chargebacks—friendly or criminal fraud
- Refund fraud
- Identify Theft Fraud
Unlike the name, this common eCommerce fraud is not friendly. Friendly fraud, also known as ‘First Party Fraud’, occurs when the customer requests refunds from their financial institution. They claim the transaction is fraudulent and the bank refunds the customer. And then your store gets a chargeback.
Friendly fraud isn’t always intentional or done with malice. When a name on the statement doesn’t match the name of the retail store, it can cause confusion for the shopper during a statement review. No matter the intent, friendly fraud represents about 40% – 80% of all fraud losses to a retailer.
Fraudulent shoppers will place orders on your website using a stolen card and its associated information. The order will use the billing and shipping information from the victim’s card. But with interception fraud, fraudsters will contact the store to change the address before shipment. In some cases, they will contact the shipper or physically wait at the address to intercept packages purchased with the stolen information.
Ways to Protect Your Website from Ecommerce Fraud
There are several ways you can protect your furniture ecommerce website using a website platform software like MicroD. The first critical step is maintaining PCI Compliance with your furniture ecommerce website.
What is PCI Compliance?
PCI Compliance is a way to keep your systems secure and your customers sensitive payment information safe. It is the payment card industry’s set of standards that your furniture store has to meet in order to keep credit card data protected. The standards are set by a council and should be standard protocol for your furniture ecommerce website platform.
Your furniture ecommerce website provider will need to maintain security around your website software to remain compliant. That means:
- Implement a firewall configuration to protect sensitive customer data information
- Enable encryption and security protocol for your website
- Establish secure payment gateways in the ecommerce software
- And much more
When it comes to your payment gateway, we found industry leaders like eMerchant often add extra layers of protection for you and your customers.
How Payment Gateways Can Prevent Ecommerce Fraud
Every payment gateway should have fraud settings for payment transactions. These settings can work with, or in addition to, your ecommerce platform fraud settings. Even if your ecommerce platform has similar settings, it’s highly recommended that you set up your fraud settings at the gateway level because that’s where the payment transaction occurs. And it’s where you can help protect your business from fraud liability and costs.
Even if some settings are pre-set in your payment gateway, be sure to review the fraud modules—ideally before you launch your ecommerce store or right now if you’ve been selling online without checking. Due to liability, your gateway provider cannot advise you on what to choose for your business, but they should show you where and how to enable fraud settings.
Top 3 Gateway Fraud Settings
Certainly, review all of the fraud settings in your gateway. Some will be more important to your business than others. However, there are several popular ones for many retailers, including:
Address Verification System (AVS) Response
Verifies that the AVS (Billing) Street and AVS (Billing) ZIP matches what the customer’s issuing bank has on file for their card. A retailer can adjust the gateway settings so that if there is a mismatch in data, the transaction can be declined.
Card ID Checker
Verifies the unique 3-digit number (Visa, MasterCard, Discover) on the back or 4-digit number (American Express) on the front of the credit card. Requiring this additional information can help verify the customer has the credit card in their possession.
Multiple Credit Cards
Allows a retailer to block transactions when multiple cards are processed/declined within a specified amount of time. This setting can prevent excessive card testing, which is used by fraudsters to test a large list of stolen credit card numbers in mere minutes.
As an extra protective measure, once your ecommerce store is processing orders, check your transactions daily. It’s a good habit. Consider it similar to setting the security system on your brick and mortar store every night. It’s a smart business practice. Simply look at a “Declines by Date” report every night (or morning) to see if you spot a high number of credit card declines—if you do, contact your payment gateway provider right away to look into for you.
Protect Your Furniture eCommerce Website
Selling online does come with risk. However, by using fraud prevention settings in your furniture ecommerce platform and payment gateway, you can significantly reduce your risk. Then you can focus instead on increasing your reward from ecommerce. If you have questions about your furniture ecommerce website platform or security in the payment gateway, please contact us.
This article is co-authored by MicroD and our partners at eMerchant, Inc.
Since 2002, eMerchant has supported more than $8 billion in payment transactions with our retail, mobile and ecommerce payment solutions. Since 2013, eMerchant has been integrated into the MicroD OmniVue platform, enabling retailers to easily and quickly open a gateway account for their ecommerce store. The eMerchantGateway has 18 fraud modules for protecting retailers. Contact eMerchant today for information or to get an online payment gateway for your business.