Every year, billions of dollars are lost to online fraud cases that eCommerce businesses face. Whether it’s a small drop shipping company or a large online retailer, fraud can be troublesome to stomp out and it will rear its ugly head when you least expect it. Failing to deal with fraud could cost you a lot of profit and will slowly start to create a negative reputation around your company.
So to help you out, we’re going to explain four of the best practices that will help you prevent fraud in your online business.
Online purchases are convenient, but also susceptible to fraud if you’re not careful..
1. Use a reputable eCommerce platform
Be it Stripe, Shopify or BigCommerce, it’s vital that you pick the right eCommerce platform to work with so that should something happen, you have excellent customer service ready and willing to help you. In addition, many of these eCommerce platforms have sturdy security systems that will make it virtually impossible for fraud to happen unless someone has quite literally stolen a customer’s bank card and logged into their account. In addition, reputable eCommerce platforms will have risk management support to help reduce the stress involved in managing a fraudulent transaction.
2. Use services to help verify customer information
There are now many businesses dedicated to helping you maintain compliance for different regulations and standards to ensure that you’re less likely to be a target of fraud. For instance, Jumio offers automated KYC compliance solutions that can be deployed almost instantly and managed using cloud-based tools that are accessible on a variety of different devices. This makes it much easier for you to check if your customers are actually legitimate buyers or if someone is using fraudulent methods to purchase your goods.
3. Bolster your website security with the right strategies
Even with the right eCommerce platform as a foundation, it’s vital that you check your website’s security to ensure that your website isn’t at risk of being compromised. Hackers could easily gain access to your website and start sniffing information such as customer login information and even bank details if you’re not careful. It’s a good idea to hire professional services now and then to do security audits of your website and ensure that your website is working correctly and has safety measures in place to prevent fraud from happening.
4. Never store more customer data than required
Most standards forbid you from storing customer information, especially sensitive data such as card numbers and security codes. If you do have this information stored due to using a relatively unknown eCommerce platform or a handmade one with little security, then it’s vital that you get rid of this information and only keep the minimum amount of data needed to process refunds and chargebacks. The exception to this rule is if you need card information for recurring payments (such as a subscription but it’s vital that this information is encrypted and kept secure to prevent it from being stolen by hackers.