5 Ways to Reduce Fraud

In 2020 alone, billions of dollars will be lost to everyday customers using their own details to maliciously purchase products online. This abuse is achieved through loopholes in the current banking chargeback system to get a refund and the product for free. This is known as chargeback fraud (friendly fraud). Unfortunately, it is incredibly difficult for traditional fraud systems to detect this behaviour as it’s the customer themselves purchasing the product, not someone who has stolen their card. Luckily, here are five ways you can reduce your own loss.

1. Keep detailed customer records

When a fraudulent chargeback is logged against your business, having all the customers records is incredibly helpful if you choose to fight the dispute with your bank. A business should keep a record of any delivery information, tracking information, customer correspondence and the customer’s IP address to give themselves the best chance of a successful outcome.

2. Take a proactive approach

Unfortunately, research shows that 96% of disputes against online businesses are won in the favour of the customer. The odds of winning a dispute are small but it shouldn’t stop you fighting a dispute when one is placed against. Physical shoplifting isn’t acceptable and has a consequence so chargeback fraud which is essentially online shoplifting, shouldn’t be either.

3. Look for repeat offenders

If a customer gets away with friendly fraud once, research shows they have an 80% chance of doing it again within X weeks. Odds are, you will be the store they try to steal from again knowing it worked the first time around. Keep a detailed record of all past disputes and be sure to cross-reference all orders with previous disputes to ensure you aren’t losing money to the same person twice.

4. Be personable with a customer

Online theft is highly lucrative due to its anonymous nature. Statistically, customers are less likely to steal from a website of which has a face behind it. Nobody likes stealing from somebody they know so the more personable you are with customers the better. Ensure your refund policies are clearly displayed, customer enquires are answered quickly and correspondence with the customer is as friendly and personable as possible.

5. Install the proper tools

General fraud tools such as Stripe radar are important but unfortunately, do not stop customers committing chargeback fraud against you. 

Disputify, an easy to use plugin, is the only solution on the market which focuses on properly combatting this multi billion dollar problem. For a small monthly fee, Disputify provides your business pre-emptive protection against ill-intentioned customers. Disputify tracks and tags fraudulent customers as they dispute products on other sites and alerts you when the same customer targets you.