It's the happiest time of the year...and the time when your store is most likely to be hit with fraudulent sales, which can cost you lots of money in chargebacks. In fact, chargebacks are likely to cost stores as much as $25 billion a year by 2020. We've already covered a number of ways you can prevent fraud on your store, but here's some additional advice for sniffing out orders that might be fake:
1. Take a look at previous transactions.
Does this customer have a history of shopping on your site? If so, take a look and see if you've had any previous communication with them as well. Other red flags may be if the credit card being used was previously removed from your system, if the customer's prior orders don't have the same name and address or if they've had multiple failed attempts to purchase on the account with different credit cards.
2. Check the IP address to see if its location matches the address on the order IP
If the order is not from a known customer, you should check the location of the IP address on the order via a free third party service like Base64. If no location is brought up, the individual could be using an open proxy or an anonymous proxy to place the order. Additionally, if the area code of the phone number doesn't match the one associated with the IP, you may want to take a second look.
3. Inspect the Domain Name and Email Address
If you're not familiar with the domain in the user's given email address, you should attempt to navigate to it. If the domain doesn't resolve to an actual site then you can also look it up on WHO.IS to see when it was registered, if it is currently active and the contact info on the registration. If the address looks to be in a first name/last name format, you can also check to see if it matches the name on order and the card on file.
4. Double-check Addresses
Is the billing address on the suspicious order the same as the shipping address? if they aren't the same, what's the distance between the billing and shipping address? And does the billing address city/state match the general location of the IP address? If anything looks fishy, you may have a fraudulent order on your hands.
5. Look for Multiple Accounts
If the order seems fishy, take a look at your system and see if the email address pops up anywhere else. Does the customer account information correlate to any already-existing accounts? If so, you may want to take a look at the order and at any other accounts the customer may have.
Hindsight is 20/20, and you may not always be able to prevent chargebacks from occuring on your store. Nonetheless, there are still ways you can be vigilant. Have any other questions about preventing chargebacks on your store? Let us know in the comments!