While we use the internet and computers for many things, most of us are guilty of a little bit of online shopping now and then.
Australians are talking somewhere in the vicinity of $11 billion in retail shopping online last year.
It is no wonder that retailers want to be playing in this space to avoid missing out on a piece of that pie.
Running an online store consists of far more than just setting up a website, taking orders and shipping goods.
One of the major thorns in the side of online businesses is fraudulent orders, particularly credit card fraud.
Almost half a billion dollars was lost by e-tailers last year in credit card fraud.
Credit card fraud generally exists when someone places an online order with a stolen credit card.
The fraudster requests the goods to be delivered to a third-party address and collects the stolen goods.
Generally, the owner of the stolen credit card requests a refund from the bank and the monetary transaction is reversed.
This leaves the retailer with no money or goods. Though this presents a major obstacle to online stores, there are things that can be done to prevent being ripped off.
Firstly, there are “more” secure payment methods available. Direct funds transfer offers the seller a safe way of receiving payment and while bank accounts can be hacked, the onus normally falls upon the bank rather than the individual or store.
PayPal and other similar payment methods often have built in buyer and seller protection against credit card fraud.
This usually means that if you ship to the place registered on their address you are protected.
Finally, you can vet the credit card holder to ensure that it is their card.
This can be done by confirming identity or even refunding a small amount to the client’s card and having them confirm they have access to the account.
Selling online can be a great opportunity for businesses to grow. Ensuring that you manage the risk of fraud is one of the challenges in this space, but for many it is worth it.
Queensland Computers combat credit card fraud
- Last year we sold approximately $3 million worth of goods online from our Bundaberg warehouse
- About 5-10 per cent of orders are fraudulent or cannot confirm their identity (some choose not to)
- Most fraudulent orders start with a small purchase $50-200 and then once it appears to have shipped use the same credit card to place a large order of +$2000.
- Almost all fraud orders are sent to a fake address (usually a unit) and the culprit waits at the address for the delivery.
- We only actually get caught out one or two times a year as we are very careful in our fraud checking and what we process.
- Other news: Smart technology raises privacy concerns