Use designated account for Internet orders (check with bank for restrictions)
90% of fraudulent orders come from free e-mail addresses. You may want to consider refusing credit card orders from customers using free e-mail.
There is a higher risk for non-tangibles (software, etc.).
Subscription services are high risk.
Verify manually if “bill to” and “ship to” are different.
Use a traceable shipping method.
Use manual credit card processing with AVS verification for least risk.
Inform customer who the charge on their credit card will come from when they look at their monthly statement in the HTML and e-mailed receipts.
International orders are the highest risk of all. Request phone # on back of card and manually verify. Once the product is out of the country, it’s gone.
Phone the customer back on large orders, especially on 2nd day or overnight shipping.
If you take Internet checks, consider using the iCheck service.
Be wary of breaking policies for customers on payment issues, it can be a fraudulent order (i.e. shipping to a 3rd party address that doesn’t match the credit card billing address because it is a gift).
The merchant is most at risk for Internet fraud and charge backs since there is no signature. Try to get backup information. Only give free offers and bonuses upon receipt of a completed warranty card or get customer receipt confirmation another way.
Problems resolved in favor of your customer, reduces the chances of negative word of mouth advertising.
Block on-line orders from high fraud domains for digitally delivered products and services. For example, do not allow orders for a download product sent to hotmail.com, yahoo.com addresses. Keep a block list of high fraud domains.
Block on-line orders from high fraud IP address blocks. Most fraudulent orders come from foreign web servers. Consider blocking all orders from known high fraud IP address blocks such as those assigned to Asian web servers in Malaysia and Indonesia.
Use a credit card processor that allows verification of the CVV2 credit card security id code which is printed in the back of most credit cards.
Beware using shopping cart systems which do not have good security systems built in. For example, one of our partners setup a Yahoo! Shopping cart and immediately after going on-line and the store was announced, their fraud rate for digitally delivered products was 50%.
Design your e-commerce system with fraud attempts in mind. You will be hit with a considerable amount of fraudulent order attempts for certain types of products, especially digitally delivered products and services.
Design your shopping cart to track orders real time with a multi-page order form and gather IP Addresses. Used in conjunction with free e-mail and ip address blocking you can spot and stop many fraud attempts real-time by analyzing the order information as it comes in before the payment page is submitted.