Merchants operating in the direct advertising and eCommerce industries need to develop procedures to assist them identify and deal with suspicious transactions before they are processed. Catching fraud prior to it even occurs is the finest way to fight it. Once you establish your policy, you need to train your staff on how to implement it.
There are a number of typical signs of suspicious customer behavior that you could want to incorporate in your procedures.
- Hesitation in Supplying Individual Details. If a cardholder is hesitating when asked for a ZIP code or the spelling of the street they live in, it may well be a sign of a fraud. Most of us can offer such details without any pause.
- Rush Orders. If a customer forgoes a totally free delivery choice in favor of a lot far more expensive overnight shipment, this could be an additional red flag. The order might be valid, as buyers occasionally do want a product as soon as probable (that is why overnight delivery services are available). On the other hand, this is a typical characteristic of fraudulent transactions, where fraudsters do not significantly care about the shipping charge.
- Random Orders. Yet another typical sign of a fraudulent transaction is that fraudsters are not very demanding about the certain features of the merchandise they are purchasing. If they are purchasing the item for a fast resale, they might not pay a lot attention to the color, for example.
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Suspicious Shipping Address. It is well advised that merchants pay unique attention to orders where the billing address is distinct from the shipping one. It is obvious why there can be a prospective for fraud in such transactions, however it will not be a great business policy to outright ban such shipments, as some merchants do. Take the following into account when devising your preventive mechanisms against suspicious card transactions:
- Orders for shipments to PO boxes and office addresses are usually fraudulent.
- It is a good policy to keep a list of ZIP codes associated with excessive levels of fraud and verify each and every order against it.
- You need to closely scrutinize international orders, particularly if you do not normally deal with such transactions.
You really should constantly maintain in mind that there could be a perfectly reasonable explanation for every suspicious card payment processing activity that you encounter. However, an effective mechanism, built into your merchant account, that screens suspicious transactions, will help you concentrate your fraud prevention efforts on the orders that genuinely want it. With time you will get much better at determining which indications, in your organization, are most likely to point at fraudulent activities and adjust your procedures accordingly. Your merchant services provider should be able to assist you in that procedure.
