The question of fraud prevention in ecommerce came up recently and inspired me to share a bit from our experience. Here are 4 common traits we found in the fraudulent orders that came through our sites:
- AOV 4x+ above our site-wide AOV
- It was usually just 1 SKU but they would order multiples of it and it was one of the most expensive products on the site.
- Billing address was always different from the shipping address.
- Shipping name/email always a first time customer
I actually think frauds pick a site and then continue to go to that site with stolen cards/info so you can find a pattern in some orders that just look odd and get to know them. Our real cost of the fraudulent charges approached ~.5% of top-line, never more but it always pissed me off.
To combat the fraud we made one simple change. We added a step to our customer success plan. Prior to shipping large orders placed by a 1st time customer we called that person to introduce ourselves. We figured if they are real orders we should know these people that are purchasing en-mass anyway and what better way to do it then a personal call.
There was only 1 instance ever where we called a fraudulent order and not only had the crook used his real # when he placed the order but he actually picked up the call! It was obviously a strange conversation.
We never had any issue contacting the real clients quickly and almost universally our clients loved the high-touch process. It was actually so successful that we put a process around these calls and used them as opportunities to not only build a relationship but also up-sell and ask for future business.
We still had small cases of fraud that made it through but their cost became negligible. I do not think we ever lost a real client/order because of the process.
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