TMCnet Feature
February 19, 2021

Tips to Prevent Fraud Related To Online Payments

When running an ecommerce site it is imperative that you are aware of online payment fraud risk. This article will outline the risks and ways to prevent them.

1. Take note of expedited shipping requests if shipping and billing addresses are not the same.

If you notice that a customer's billing address and shipping address differ, and there has been a request for expedited transport of the package, there is a greater chance of fraud. This is also true when the shipping address used and the credit card billing address differ. While this is not necessarily evidence of fraud in and of itself (gift purchases will often involve two different addresses), it can be a red flag that requires a follow-up phone call or some other kind of further inquiry.

2. Check to see that the credit card address matches the IP location.

It is best to remain vigilant about IP addresses that come from a far-flung location and which do not line up with the address of the credit card used for a given transaction. It is not difficult to research the origin of an IP address by using sites such as

A great way to reduce the volume of transactions such as these is to simply block IP addresses linked to geographical areas to which you do not ship products. Any small ecommerce website can be programmed to stop visitors from completing the checkout process altogether. Certain e-commerce platforms make this easy by including settings capable of blocking particular IP addresses, eliminating the need for specialized programming.

3. Stay on guard for unusual email addresses.

There are certain types of email addresses that give real clues that they are being used to place fraudulent orders. Looking at the actual addresses being used to place orders is a great way to weed out fraudsters. An address such as is an example of an address that should be sounding alarm bells.

4. Try to track down suspicious-sounding street addresses.

A great way to ferret out fraud is to do a little research into a billing or shipping address that catches your eye as potentially fraudulent. Luckily, online websites such as Zillow or Google (News - Alert) Maps make this easier than ever. ZabaSearch is another site that can help verify whether or not a customer truly resides at the claimed address, a step that really can help cut down on fraudulent transactions.

5. Maintain a credit card number log.

It makes good sense to maintain a log of each time a customer attempts to type in a credit card number to make a purchase. Should the number of attempts exceed five or so, fraud is likely occurring. The majority of credit card processing companies will let you take a look at batch transactions, and when multiple card number attempts have been made, the transactions and accounts ought to be flagged.

6. Utilize fraud profilers.

While not every online merchant will require such a service, fraud profiling services can be a great safeguard to have in place. MaxMind, or similar providers work to conduct cross-referencing for names, IP addresses, prior transactions, and more. Knowing the patterns of per-purchase habits gives these profilers the ability to produce insightful assessments of every transaction, spotting the ones that are especially high-risk. Volusion is an e-commerce platform that offers fraud profiling assistance as an add-on service that works collaboratively with the company's own software.

7. Limit the permissible number of declined purchase attempts.

Whenever a scam artist attempts a fraudulent transaction, it may be that they are using a software script that runs a series of numbers in rapid-fire succession. Because you might be charged a fee every time a transaction is declined, you need to make sure that there is an upper limit on the number of times someone can put in non-functional credit card numbers. Once that limit has been reached, that buyer needs to be banned.

8. Security codes must always be required.

The three-digit security codes found on the flip side of credit cards should be made a prerequisite for any transaction. These combinations are not kept on the card's magnetic strip, and therefore it is more difficult for scammers to obtain them if they don't have the actual card in their hands. Some card issuers refer to this code as a CVV2, CVC2, or CID, but regardless of what it is called, it should be required before any purchase can be made.

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