Defend your business against 3 types of online shopping fraud

E-commerce EMV technology. While EMV mostly covers in-person transactions, Click to Pay—available through a Visa, Mastercard, Discover, and American Express consortium—can improve the security of e-commerce transactions. Customers save credit or debit cards in the Click to Pay system. When they make a purchase, they click a single button, which sends them a security code that they use to choose from the payment cards they’ve saved. So customers don’t have to enter a credit card, expiration date, etc., each time they make a purchase. But neither do they have to worry about saving their card information with merchants. The card details stay within the secure Click to Pay system.

3D Secure 2.0. This extra layer of security helps validate the identity of customers and minimize the risk of fraudulent charges. With 3D Secure 2.0, the card issuer can use dozens of data points—like device ID, transaction history, and time zone—for risk-based authentication without creating more customer friction. Using 3D Secure 2.0 can help shift liability for fraud from merchants. 3D Secure 2.0 is required in Europe, but U.S. e-commerce companies may also want to talk to their payment service provider about implementing it.

First-party fraud. A customer pretends not to have received goods or services or has buyer’s remorse about a purchase and tries to get out of it through the chargeback process.

Customer confusion. This occurs when customers forget making a purchase, don’t recognize an item on their statement, or don’t realize that a family member bought something with their card. Or they may become frustrated with your customer service and resort to contacting their card company for relief.

Send automated email confirmations when an order is placed, then track shipments and require a signature at delivery, when feasible, to help defend against chargeback fraud.

Block known first-party fraudsters from making future purchases.

Work with issuers through networks like Ethoca and Verifii to provide relevant transaction and order data before chargebacks are filed.

If you sell subscriptions, make the terms crystal clear, make canceling a subscription easy, and send a reminder when the subscription is about to renew.

Chatbots, FAQs, and similar unstaffed resources can reduce costs and take care of many customer queries quickly and easily, but make sure customers can reach a helpful agent if they need to. Frustration can lead them to a chargeback, leaving you with financial institution fees on top of the loss of the sale and customer goodwill.

Monitor and analyze traffic. Ensure that your traffic monitoring system allows you to log affiliate IDs for an accurate view of how many users they bring. You should also log whether the users they bring make a purchase, because once you have a large database of these leads, you can more easily distinguish legitimate affiliates from fraudulent ones.

Enable device fingerprinting. Block bots from entering in the first place with device fingerprinting. With this software, you can create IDs for the configurations between software and hardware of users that land on your page. Then you can begin to notice anomalies: Has this exact configuration already been used? Is it a case of multiaccounting? Does the device point to an emulator like FraudFox or Linken Sphere? This will help you build a 360-degree profile of all your users so you can spot fraudsters in real time.