eCommerce Fraud

[MrSparks]

Any tips on avoiding eCommerce fraud?

Recently we're losing a lot of money.

We've had phone orders with stolen cards, lost nearly £2000 this month, however all cards were registered overseas so we have now updated our Stripe integration and it shows the card country on our order form. We're also manually checking so these can be easily avoided. Waiting for RADAR to go live so we can automatically block all non-UK cards.

We only ship to the billing address for phone orders, but they have ways around that, I guess they intercept somehow.

Also getting quite a few online, even for some items I thought fraudsters wouldn't bother with (Shuko socket outlets!)

Two separate orders last week for £600+.. this morning I get an email from Stripe saying the card is suspected stolen.

Billing address is a long way from the delivery address, a flat in London.

I checked the second order for similar products and whilst it's not flagged as stolen (yet) its a NI card with a London delivery address to another flat.

Basically I can't afford to be losing as much money as we're currently losing.

What else can we be doing to prevent fraud?

I don't even bother reporting it to ActionFRAUD any more, last time I sent names, addresses, phone numbers as I'd managed to buy the item back from eBay (only 1 of the item in the UK at the time) and I didn't even get a reply.

Or do I simply just need to sell a lot more to outweigh the fraud?

[DSLiverpool]

Simple but effective and quick.

Thank client for order, say a random check has resulted in a small refund back to their account, if they can verify this amount refunded then the order ships straight away.

Refund 1-99p and wait to be told the amount or not as may be.

If fraud you will eventually get charged for the chargeback I think £25? however we only refunded by chargeback and were many thousands ahead through banks not reclaiming undelivered fraudulent sales.

[MrSparks]

DSLiverpool said:

Simple but effective and quick.

Thank client for order, say a random check has resulted in a small refund back to their account, if they can verify this amount refunded then the order ships straight away.

Refund 1-99p and wait to be told the amount or not as may be.

If fraud you will eventually get charged for the chargeback I think £25? however we only refunded by chargeback and were many thousands ahead through banks not reclaiming undelivered fraudulent sales.

Thanks, excellent advice as usual.

So if there is one that we're just not too sure about, we simply refund an amount between 1-99p and if they can't tell us what that amount is then it's probably fraud?

Seems like a great way to rule out some of these recent ones that, on the face of it, seem to check out as legit.

[DSLiverpool]

Yep - tell them its an internal random procedure and can they please advise the amount of the refund just placed back on their card - to do so they will need to get past bank security.

2 Things will happen, a genuine buyer may say its a faff but will do it once you say its a two way protection, a fraud buyer will maybe have a guess but you will never hear from them again after the odd email.

[ctrph]

I sell high value goods and what I did to reduce fraud was to introduce 3d secure on all transactions and we only post to the billing address. Some people complain about this but many understand when I explain why its done

[DSLiverpool]

3D is one of the biggest abandoned cart contributors across shopify sites, now maybe it's because it flags up all the attempted fraud but the potential collateral damage to sales might be worse than the cost of the fraud.

[ctrph]

DSLiverpool said:

3D is one of the biggest abandoned cart contributors across shopify sites, now maybe it's because it flags up all the attempted fraud but the potential collateral damage to sales might be worse than the cost of the fraud.

I have heard that a lot and I think it very much depends on the market you are in. For cheap products, I can understand that having 3D secure can impact sales negatively as it seems like an unnecessary step but for expensive products (mine range from £500 to £3000) where fraud is a big problem it is better to have a couple of abandoned carts than potentially lose thousands to fraud.

[anonymous-user]

How long would you need to delay shipping an order for in order for frauds to make themselves known?

If it is only a day, I’d wait. If it is much longer, this is a bad idea

[DSLiverpool]

JPJPJP said:

How long would you need to delay shipping an order for in order for frauds to make themselves known?

If it is only a day, I’d wait. If it is much longer, this is a bad idea

Its often 7 / 14 days but ....

Few years back had an order on friday, drop shipped it monday but wasnt in stock so emailed client who said "ok to wait" it was 10 days and we refunded 10% as a "sorry" in all it was 14 days and we heard after 5 weeks!.

Last year we had a needleworks site selling record players, it took an obvious fraud order for 4 units at £550, buyer chased up a few times and we fobbed them off obviously we never shipped it and buyer only chased twice - never came up as fraud (14 months and counting)

[DSLiverpool]

ctrph said:

DSLiverpool said:

3D is one of the biggest abandoned cart contributors across shopify sites, now maybe it's because it flags up all the attempted fraud but the potential collateral damage to sales might be worse than the cost of the fraud.

I have heard that a lot and I think it very much depends on the market you are in. For cheap products, I can understand that having 3D secure can impact sales negatively as it seems like an unnecessary step but for expensive products (mine range from £500 to £3000) where fraud is a big problem it is better to have a couple of abandoned carts than potentially lose thousands to fraud.

Just to add the Shopify gateway has very advanced fraud detection built in to the order page (I`ll grab a screenshot tomorrow) makes me wish I was on it when I traded.

[RM]

DSLiverpool said:

3D is one of the biggest abandoned cart contributors across shopify sites, now maybe it's because it flags up all the attempted fraud but the potential collateral damage to sales might be worse than the cost of the fraud.

Any figures on this? 3D Secure certainly used to reduce conversion a great deal, but most consumers are used to it these days, or so I thought.

Depending upon the net margin it can take a lot of sales to compensate for fraud.

[DSLiverpool]

RM said:

DSLiverpool said:

3D is one of the biggest abandoned cart contributors across shopify sites, now maybe it's because it flags up all the attempted fraud but the potential collateral damage to sales might be worse than the cost of the fraud.

Any figures on this? 3D Secure certainly used to reduce conversion a great deal, but most consumers are used to it these days, or so I thought.

Depending upon the net margin it can take a lot of sales to compensate for fraud.

It was brought up at the Shopify partner meeting earlier this year but I don't have figures only anectodotal however the "refund a bit and verify" is a good method. (I'm meaning to refund under £1)

[RM]

DSLiverpool said:

It was brought up at the Shopify partner meeting earlier this year but I don't have figures only anectodotal however the "refund a bit and verify" is a good method. (I'm meaning to refund under £1)

Yes your method sounds good, but I wonder how much the 3D as cause of abandonment is false these days.

As 3D is on invitation only in the UK for Stripe, then I assume they were using other gateways also. Could this have contributed, how good is Shopify integration with the other gateways?

[RM]

Just re-read OP to see the majority of the fraud was from phone orders. What business are you in that you accept phone orders? They should be collection with payment by chip and pin only. No chip and pin and no 3D is asking for fraud.

If it is expected that you should accept phone orders (though I can't think of any business that should, but please say which), then DSL's method is perfect I would say.

[KevinCamaroSS]

As somebody else has mentioned already you only ship to the billing address.

[DSLiverpool]

RM said:

Yes your method sounds good, but I wonder how much the 3D as cause of abandonment is false these days.

As 3D is on invitation only in the UK for Stripe, then I assume they were using other gateways also. Could this have contributed, how good is Shopify integration with the other gateways?

Shopify are competitive as a gateway and processor however as a gateway only they are a pricey up until serious volume, as such the majority are smaller sellers using the full shopify processing. To integrate Shopify with anything is straighforward a few Ukrainian companies do it from scratch but chances are it already exists.
If you sell say Vaping or medicines then Shopify wont process for you and you go via Paypal Pro in most cases.

[dmsims]

Which ecommerce sofware are you using?

PS the SSL on your site is not displaying correctly because some stuff is still loading via HTTP

[dmsims]

Magento - you can tell because it's slow

anyway have you considered Maxmind ?

[DSLiverpool]

Example of the shopify dashboard for card issues. This is accessed on the same screen as your orders.

[MrSparks]

dmsims said:

Magento - you can tell because it's slow

anyway have you considered Maxmind ?

It is pretty slow, front end isn't always that bad. Admin is mostly un-usable since we changed to a VPS (ironically, meant to be better)

Who's the best for Magento hosting these days? The place I currently use aren't that great any more to be honest.