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Understanding Fraud and How to Correctly Handle the Situation

Credit card fraud is a big problem in ecommerce. Data is very vulnerable in this day and age of digital downloading and saving purchase information to your accounts. The value of credit card fraud in 2018 is reportedly set to hit $19 billion.

As a Shopify storeowner, you may be faced with cases of credit card fraud within your store from time to time. It’s important to spot signs of credit card fraud and know how to handle reported credit card fraud.

Signs of Fraud

Businesses often don’t have the capability to look over every purchase that comes into their website, especially if they’re doing well in sales and traffic. If a business gets 200 transactions a day, do you think every single one is processed and combed through? No. This cannot be expected of small businesses, and this is one of the biggest risks to online shopping.

However, smaller businesses should do their due diligence and notice some pretty big warning signs that come attached to fraudulent purchases:

  • There are discrepancies in nationality or language. Many credit card fraud farms exist in countries like Vietnam, Russia or India – but don’t automatically begin to discriminate. Look for email addresses with names attached that don’t sync up with the name on the credit card. For instance, someone who has the email vishnubatra@gmail.com but lists the credit card as John Smith.
  • On a similar note, check to see how vastly different the shipping and billing addresses are. If the billing address is in California but the shipping address is Moscow, something is probably amiss.
  • Credit card fraud perpetrators like to get their purchases fast and will often request bulk orders with a small delivery time frame. For instance, they might request 100 of a certain item and expect it within a two day delivery window. This can be very suspicious, so screen these purchases.
  • Never be afraid to email a customer directly and ask about their purchase to see the temperature of their response. Go with your gut – if they seem shady then they might be, but provide valid suspicion. If you aren’t 100% certain, continue through with the purchase.

Handling Fraud with Customers and Thieves

First understand that you are a secondary victim in this situation – your consumer is the one who has been stolen from with nothing to show for it. A credit card company or bank has already paid your bill, and you have insurance in place (or, you should have insurance in place) to protect your business.

It’s your duty as a Shopify storeowner to give customers the best service possible. Rewind has a mission to give all of our customers the best backup systems as possible with customer service that may be even better than our product – what’s your customer service mission?

You hold very important information in your hands as the middleman between thief and victim. You have an obligation to help resolve this issue, though this is usually done between a customer and their financial establishment. Relinquish any and all information you have that can help in resolving the issue and apprehending the crook.

When it comes to the fraud perpetuator, remember that they may strike again with a similar scheme. Keep as much of the data that you have for them on file and look for information repetition – a similar location or email address could tip you off that they’re up to their old tricks.

Mike Potter

Written by Mike Potter

Mike is a serial entrepreneur and currently the co-founder and CEO of Rewind.

Rewind securely backs up your online data helping you recovered deleted items and undo changes easily. Get peace of mind with Rewind. Available for:




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