Businesses, no matter how small, need an online presence these days, often making them fair game for cyber confident tricksters.
There is no doubt that e-commerce paves the way for businesses to reach their target market, but on the downside it’s these business that fraudsters find easy to target.
It Comes at a Price
By introducing an efficient e-commerce option on your website, you must be confident that your product or service is viable. Your aim is to increase sales through your online presence. This is all well and good and is likely to reap benefits but be aware that you could be the victim of e-commerce fraud. Experian, the credit reporting company, reported that there was a 30 per cent increase in this type of fraud in a 12-month period between 2016 and 2017. It claims that a reported 11 per cent of the UK’s population were victims of identity fraud over the same period.
It goes without saying that e-commerce is a blessing for any budding business, so don’t let online fraud stand in the way of your business making a healthy profit.
The main e-commerce threats are identity theft and friendly fraud.
Identity Theft
Fraudsters in possession of a credit card’s relevant details are sure to go down the online route. This is because it eliminates any personal contact with the retailer Making authorisation mandatory with each payment can go a long way to protect you from scams.
A standard authenticity test isn’t foolproof though and it won’t necessarily stop any shady transactions unless the card is reported lost or stolen. As long as there’s sufficient funds in the account and the card number and three-digit security code is correct, it will result in a done dodgy deal.
Adding the authenticity layer, however, does mean you won’t be liable for reimbursing the full amount to the genuine cardholder. If you do have to refund the actual cardholder the money this is known as a “chargeback” and you should keep records of these transactions so that you won’t be stung by the same fraudster again.
Friendly Fraud
Watch out for this because it can have an impact on your profits. A friendly fraud means that your customer pays for a product and then claims it was never delivered or that it was damaged in transit. This results in refunds or even replacing and delivering the product again.
This type of fraud is so prevalent it has been categorised into:
- Accidental fraud – when the buyer can’t recall initiating the transaction and demands a chargeback.
- Family fraud – when a member of the family purchases items without the consent of the cardholder. This fraud is often carried out by young children.
- Opportunistic fraud – when a customer makes an online purchase such as a plane ticket, knowing that they can negotiate an upgrade rather than a refund.
It is inevitable these challenges will come your way and it is make or break depending on how you approach them. Don’t forget the backbone of your business is customer loyalty. It will pay in the long run if you see this type of fraud for what it is – friendly.