Frauds can be stressful for you and your business. They cause a lot of trouble to the merchant. Digital payments have made payments easier but have increased the chances of fraud. E-commerce sites like Shopify extensively deal with such frauds and fraudsters.
Shopify is constantly working to adapt to the emerging risks in order to keep merchants and customers safe. It provides its customer with fraud analysis which gives fraud recommendations on all online credit card orders.
Fraud recommendations are driven by machine learning algorithms that are trained on previous transactions across all Shopify stores. Years of fraud detection experience are reflected in the recommendations. These algorithms are always being improved by Shopify in order to better identify fraudulent orders.
The fraud recommendation indicates whether a transaction has a low, medium, or high probability of being charged back owing to fraud. If an order has a medium or high risk, it will be marked with a warning sign next to the order number on the Orders page.
Reasons Why An Order Might Be Flagged As High Risk
You can also analyse a potential fraud manually. An order is deemed high-risk fraud if it has the following characteristics:
High order value – High order value is considered one of the biggest reasons some orders are flagged as high risk orders. The order becomes even more suspicious when a first-time visitor places an order with high value.
Different billing and shipping orders – A mismatch in the billing address and shipping address can put the order in the high-risk category.
History of Frauds – It is obvious that, if a customer has a history of fraudulent orders then the order is flagged as a high risk order.
Phone Orders – If your store allows phone orders then there are high chances that you might be targeted for fraud. Fraudsters often take advantage of phone orders and place fraudulent orders and it is often hard to detect potential frauds because it is not possible for Shopify to verify the person’s identity.
Multiple attempts in placing orders – Multiple attempts while placing orders with numerous cards is also a sign of an order with high risk.
High-Risk Fraud Detected – Now What?
If you find a potential high-risk fraud then you can keep the order on hold. If you wish to put an order on hold, first of all, when an order is placed on hold, you must alert the customer and tell them a valid reason for the hold. Thoroughly review their order and verify their identity until you have no doubt left. If you suspect a transaction is fraudulent, take the following steps:
Contact with the customer: Directly contacting the customer through email or a phone call can be a reliable method of determining whether or not an order is fake. You can give the customer a call if there is a phone number on the order or send them an email. If they are aware of the order and confirm the specifics like products ordered and shipping address, then the order is most likely genuine. If a customer cannot recall their order or verify the order details then it is most likely a fake order.
Request more information from the consumer: If you have questions about the order, you can ask the customer for more information. You can ask for their driving license as identity proof or something that verify their shipping address. Remember to ask your customer politely as they could be a genuine customer who might have made a few mistakes while placing an order.
Verify their IP Address: A mismatch in the IP address of shipping address and billing address can be a sign of fraudulent order. In Shopify, the IP address of customers is recorded when they place their orders. You can copy-paste their IP address on google and check if it is linked to a proxy service or a web hosting company. If it is then, they are most likely to be a fraud.
Review the order specifics: Before determining whether or not to decline the order, make sure you review all of the order details. You will find information about the consumer and the things they ordered in the order details.
You must take the decision of high-risk orders within a few days, as any delay in the process can result in a chargeback from the customer.
What to do with the high-risk orders?
If you are sure that the customer is a fraud, you always have an option of order cancellation and refunding your consumer right away. You must cancel the order to prevent employees or fulfilment services from working on it further. After cancelling the order do not forget to mark the order as a fraud. This can help the Shopify community.
Conclusion
Shopify protects its customer from all the potential frauds with its smart fraud analysis. When high-risk fraud is detected you must thoroughly review and verify the order and the customer before taking any further decision. Do checkout our another article on Best Application for Shopify Dropshipping.
