Protect Your eCommerce Dropship Business From Fraud
Posted by Hope Whitley on Sat, Sep 12, 2009 @ 04:11 PM
Unfortunately, your dropship ecommerce business is at risk of credit card fraud.
Fraudulent purchases can make a significant dent in your profit! If you check with your bank, you will probably learn that online merchants have little, if any, protection from credit card fraud.
Even if you are using the bank’s payment gateway, all a credit card owner has to do is contact their own bank and dispute a transaction to set in motion a usually irreversible charge back to you.
Ouch!
But there are some simple steps you can take to help protect your dropship business from online fraud.
First of all, you should be savvy to the signs of credit card fraud, and be very aware of high risk payments.
Here are some high risk areas of credit card fraud:
- Buyers who submit several different credit cards until one finally goes through
- Buyers who use a post office box as a delivery address
- Buyers who buy/spend a lot more than your average buyer
- Buyers who provide a free email account address for contact, such as Yahoo or Hotmail
Buyers from other countries who want overnight or express shipping
- Buyers from other countries, period
- Buyers from countries you don’t usually deal with or see
These are not conclusive signs of fraud, of course. Many people use free email accounts, and often some of your best customers will be from other countries.
However, research shows that these are high indicators of possible credit card fraud, so just keep an eagle eye on these types of transactions.
If you suspect fraud, here are some things you can do to try and protect yourself:
- Require the 3 or 4 digit number on the back of the credit card. A lot of scammers use lists of credit card numbers, but they don’t have access to the security ID numbers on the cards.
- Don’t accept payments through an email. Always use a secure payment gateway.
- Especially with a purchase that is unusually large and questionable for any of the above reasons, call the person on the phone to verify identity.
- Check phone numbers against an online directory.
- Check addresses through an online postage service such as Endicia. Many bogus names and addresses are caught this way because Endicia automatically runs verification on all domestic postage.
- Never deliver to an international PO box.
In addition, there is software available that will automatically check for fraud and alert you instantly.
Don’t be a sitting duck for scammers! Be proactive about protecting your dropshipping business from credit card abuse.