According to the U.S. Department of Commerce, online sales in 2021 are high and continuing to grow. Total sales during Q2 of 2021 online were $1,666.8 billion, a rise of five percent from the first three months of the year.
As eCommerce grows, though, so too do the scams and fraudsters trying to make a quick buck illegally online. With the holidays approaching, here’s how to be on the lookout and prevent potential fraudulent sales.
BIN attacks, or bank identification number attacks, are one of the most common online shopping fraudulent scams you’ll find. Cybercriminals purchase a bundle of credit card numbers online, then test out CVVs at online checkout to see if they can get the card to go through.
In fact, this type of online fraud actually leans on small businesses to help the scam succeed. By testing CVVs on unsuspecting small online mobile stores for small amounts, criminals can determine which credit cards work before their owner figures out their information was stolen.
Adding fraud prevention security features, such as a CAPTCHA form, as well as having the form reset after declined credentials are punched in, are some of the ways to help prevent BIN attacks.
It seems like everyone you talk to now receives multiple emails, text messages, or even phone calls each week that seem sketchy. The rise in phishing scams, which are fake correspondents being sent out that are made to look like professional, reputable businesses, has been well documented in the past 24 months.
Unfortunately, phishing fraud is becoming a real problem that forces consumers to be careful about trusting the validity of online businesses when shopping.
If hackers gain access to your data and contact your clients, transparency is key. Letting them know it wasn’t you right away and explaining the safety measures you’re putting in place to prevent it from happening again will help instill trust in your audience.
Chargeback fraud, also called friendly fraud, happens when a cardholder contacts the issuer for a refund despite the charge being valid. In essence, the card issuer validates the claim and issues a refund at the expense of the merchant who just essentially gave away their product or goods for free.
3D security features a chargeback management solution that can stop this scam in its tracks. Outsource the process of keeping track of chargebacks, recover lost revenue, and use advanced analytics to shore up any vulnerable parts of your online shopping process.
Buy online, pick-up in-store (BOPIS) scams have grown substantially since the COVID-19 pandemic began. While this contactless method of online shopping is popular among both shoppers and companies—neither has to worry about shipping costs or logistics—recent scams have begun utilizing this strategy.
Fraudsters aim to take over accounts or steal credentials to order items and pick them up. For companies utilizing BOPIS methods in their business, adding some type of verification during the pick-up process can help reduce this scam’s effectiveness.
If you’re using data analytics software to inform your online business practices, consider adding key risk indicators, or KRIs, into the mix. These are ubiquitous with banks, government software, and other high-risk online platforms, but should be widely adopted by small business owners as well.
Some KRIs that can prevent fraudulent charges on your site include:
Speak with your analytics team or look into data-driven online payment processors that could prevent attacks before they happen.
Two-step verification makes it much harder for would-be criminals to get away with online scams. CAPTCHA is one popular tool, but so are one-time passcodes sent to phones or emails are both simple tools that won’t deter customers from buying and protect them at checkout.
Two-step verification also cuts down on the number of staff you need to devote to preventing fraud or preventing website downtime, which can be important during the stressful and busy holiday season.
The holidays are right around the corner. Take the steps now to ensure everyone is protected from fraudulent activity— and so you don’t lose profits (or customer trust).
Learn more about Pinpoint Payment’s eCommerce solutions for payment processing and how they can protect your small business from holiday fraudulent activity.