Update: We have published a follow up to this post, Don’t Become A Stolen Credit Card Test Site, which contains more tips for dealing with stolen credit cards.
Fraudulent web and phone orders are nothing new in the world of commerce. According to a JP Morgan poll, typical financial total loss incurred by companies due to payments fraud in 2013 was $23,100.00. While overall fraud has trended down slightly since a peak of 73% in 2009, 60% of merchants were exposed to actual or attempted fraudulent payments in 2013.
The decline we’ve seen in the past few years can be attributed to several factors, chiefly payment gateway accounts adding more complex verification systems in place at checkout. However that 60% figure still looms large. Third-party paid solutions such as Riskified and MaxMind (both Monsoon Commerce partners) offer additional fraud prevention relying on algorithms using additional data to determine levels of potential fraud at and after checkout.
There is good news for Monsoon OMS users, who with minimal effort, have an additional line of defense when dealing with fraudsters. One of the simplest ways to flag potential fraud orders is through configuring Approval Rules within the system. Some of the most popular fraud flags can easily be factored into order Approval logic and the use of Order States. If you’re not a Monsoon OMS user, you can still use these tips manually.
- Email, phone or IP Address # is on the Do Not Ship To list: Pretty much self-explanatory. If you have a repeat offender, configure a rule to not approve orders from this problematic buyer. Future orders can then be automatically cancelled or suspended in an Order State allowing your team to quickly contact the customer and verify your suspicions.
- Separate Billing and Ship To Address: Monsoon OMS can easily catch the majority of fraud attempts simply by flagging for orders with a different “ship to address” than the “bill to address”.
- Specific Products and Product Total: Fraudsters want to make their attempts worthwhile, so they tend to order your most expensive items. Monsoon OMS allow you to flag orders for specific product and/or for order totals. You can even create complex rules that require an order to satisfy multiple requirements to trigger a flag.
- Shipping Methods: Since fraudsters are using stolen credit cards, they’ll often choose very expensive expedited services. With OMS, you can require manual review of any shipping service. One thing to be on the lookout for is expedited orders shipping to freight forwarding companies. These companies receive shipments at domestic addresses to be forwarded out of the country and are a hot bed for fraudulent e-commerce orders.
- AVS Code: OMS Approval rules can be set to catch and hold orders with specific AVS codes. This allows you to increase sales on the cart by allowing a more lenient AVS policy but holding the shipment, at import, until your team has verified that the order is not a fraud.
One other thing to keep in mind is that Approval Rules in OMS are tiered top to bottom. In the example above, Rule #1 will be applied first, and if it passes its conditions, Rule #2 will be applied and so forth. Monsoon OMS allows you to combine Shopping Cart/Payment Gateway functionality, with fraud checking systems like Riskified, and robustly configured Approval Rules which fortify your defense against fraudulent transactions.
Have questions? Please contact us anytime.