Just because online transaction are not usual in traditional business where you meet your customer to deal your transaction. Online you will never see your customer and you will not be able to use your natural intuition to discover if this new commercial partner is reliable or not.

You need to set up a methodology to reduce your exposure to fraud. How?

It's quite simple, you need to analyze your website, your range of product, the way you deliver your products, what is said about you eCommerce website on the web, etc. in one word, be AWARE of what your website represents to your potential customers, are you vulnerable or not?

You need to setup very simple procedure that will pinpoint the potential risks. When?

It would be nice if I could give you a simple recipe to face that kind of risk. But I don't have it! What I could propose is to create your own recipe with all the ingredients that form your eCommerce activity.

Analysis

Online Fraud Screening is probably consider by many eCommerce manager as a lost of time and money...

"My company can face a fraud from time to time, it's not a problem for us.", I have heard this sentence one from a customer that was not even able to tell me how much Online Fraud costs to his company last year. When I talk to the Financial Director, he told me that the fraud was about 30,000 Euro. So I came back to the eShop manager to ask him if he could afford to loos 30,000 Euro every year on logistic? He told me certainly not. When he discover that he was already loosing that money on a "hidden kind of" logistic, he was ready to talk about fraud screening.

This customer was not using a very complex system, just an hosted eShop with a third party payment provider with online fraud screening embedded.

The first step was for me to check what he was doing with the info provided by his Payment provider and if it was enough to consider to be protected in term of fraud.

Step 2 was to create with him a very simple way to categorize all the orders from reliable to risky.

Step 3 was to select some tool to be used to qualify the fraud. (one of them was simply using the white page to check the customer address, another one was to send an email to confirm so detail of the order, etc.) Like you see here, none of these tools cost to my customer an additional budget but was useful enough to find out some anomalies in the orders.

Step 4 was to archive all the order to be use as statistics for the future.

Step 5 was to ALWAYS complain to authorities when a fraud is detected.

From that moment my customer reduces his exposure to fraud from 30,000 Euro to less that 1,000 Euro. Fraud screening is a Methodology not a score that you trust... It's a soft paranoia that will save you from loosing money (charge back) & products.