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Learn exactly how merchants can protect themselves from the growing rate of chargeback fraud.

Credit Card Fraud Techniques: How to Identify Them & Keep Your Business Safe

Credit Card Fraud Techniques: How to Identify Them & Keep Your Business Safe Technology is developing at an unbelievable pace. As our technology develops, so do the gaps in security measures, leaving many businesses and individuals vulnerable to credit card fraud. The reality is that, according to a study done by Kount, a staggering 40% of all financial fraud is related to credit cards. What's even more shocking is that this translates to $5.55 billion worldwide! There are various techniques that you and your business can adopt to avoid credit card fraud, and stop those devious fraudsters in their tracks.......

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How to Handle Shopify Orders That Have a High Risk of Fraud

How to Handle Shopify Orders That Have a High Risk of Fraud

Shopify is a platform for businesses of all sizes to create an online store. It offers users a customizable platform, an easy-to-use checkout process, and a wide range of features. However, with great power comes great responsibility.

Unfortunately, Shopify’s popularity has come at the expense of many different types of e-commerce fraud. This post will discuss how to handle and fulfill high-risk orders on Shopify.

How to Know if an Order Is Fraudulent

There are a few ways to determine if an order is fraudulent on Shopify. These include:

Order history discrepancies

One way is to look at the order history and compare the new order to previous orders. If there are large discrepancies between the orders, like a sudden and significant order amount, it could be a sign that the order is fraudulent.

IP address irregularities

Another way to tell if an order is fraudulent is by looking at the customer’s IP address. If the billing IP address isn’t located near or close to the shipping address, this could be a sign the order is fraudulent.

Changes in a customer’s shipping details

One possible sign that a purchase may be fraudulent is if the shipping address changes after the initial order is placed. This could be an indication that the purchaser is trying to hide their true location, which could be a sign of criminal activity.

Multiple failed order attempts

If a customer is trying to place an order multiple times, it could be a sign that they are trying to commit fraud. This could be because they are trying to place fake orders or orders with stolen credit card information. If you suspect a customer is trying to commit fraud, it is recommended you block high-risk orders and attempt to verify the customer’s personal details.

Can High-Risk Orders Be Managed?

There are various ways to manage high-risk orders on Shopify. These include:

In-app fraud checks

In-app fraud checks are a way to prevent Shopify fraud by verifying that the person trying to make a purchase is actually the person who created the account. This can be done by asking for verification information like a birthdate or address, using fraud prevention software like Shopify’s fraud analysis, or by requiring a password or authentication code that is only known to the account holder. This helps to prevent someone from stealing another person’s account and making fraudulent purchases or chargebacks.

Order verifications

  • Just like in-app checks, an order verification is a process by which a customer’s order is checked against the information on their account to ensure that the order is valid. This can help to prevent Shopify fraud, as it makes it more difficult for someone to place an order using someone else’s account information. Order verifications can also help to ensure that orders are placed accurately and that no mistakes are made.

Is Managing High-Risk Orders Worth the Effort?

Generally speaking, managing high-risk Shopify orders can be worth the effort for merchants who are able to secure a favorable payment processing agreement with a reputable merchant account provider.

By taking these precautionary steps, you can prevent fraudulent orders, flag a customer that is making repeated and suspicious orders, and subsequently lessen the headaches and potential revenue loss now and in the future.

Risk Factors Associated with E-Commerce Fraud

Risk Factors Associated with E-Commerce Fraud

E-commerce fraud is the use of fraudulent means to obtain money or goods through online transactions. The consequences of e-commerce fraud can be significant for businesses. They include financial loss, damage to reputation, and loss of customers.

To help reduce the risk of e-commerce fraud, here’s a breakdown of the different types of e-commerce revenue fraud schemes with examples.

Types of E-Commerce Fraud

There are several types of e-commerce fraud you should be aware of. These include:

Account Takeover Fraud

Account takeover fraud is the unauthorized use of an account that belongs to another person. This can be done by stealing personal information, such as a social security number, or by hacking into a computer system. Once the perpetrator has access to the account, they can use it to make fraudulent purchases or withdraw money.

An example of this would be if someone gained access to your bank account information and used it to make unauthorized withdrawals or purchases.

Friendly Fraud

Friendly fraud is a term used to describe when someone uses a credit card or other type of payment method to make a purchase, but later disputes the charge through a chargeback. The perpetrator does this intending to keep the product or service without paying for it. This can be done by either contacting the merchant directly and alleging that the product was not received or defective, or by filing a dispute with the credit card company after the fact.

Interception Fraud

Interception fraud occurs when the perpetrator uses a stolen credit card or a hacked third-party payment system account to purchase online goods. Once the order is placed, the fraudsters then attempt to intercept the parcel using one of the following methods:

  1. Stealing the order from the drop-off location.
  2. Redirecting the parcel by contacting the online store and requesting the order be sent to an address of their choosing.
  3. Contacting the shipping company and rerouting the package to a destination of their choice.

How Can You Identify E-Commerce Fraud?

There are a few ways to identify e-commerce fraud. One way is to watch for anomalies in customer behavior, such as sudden spikes in activity or orders placed from unusual locations. You can also look for discrepancies in order information, such as mismatches between the shipping and billing addresses or items ordered that don’t seem to be related. Additionally, you can use security features like two-factor authentication to ensure that the person placing the order is actually the customer.

Can You Prevent E-Commerce Fraud?

It is possible to prevent fraud. To do so, online businesses need to understand which types of attacks are possible. With this knowledge, appropriately placed security measures can help to protect both the business and their customers.

One of the most important things businesses can do is to make sure the business has a secure website. This means using strong passwords, encrypting information, and firewalls. They should also keep their software up to date. You could also use a fraud risk assessment checklist or survey to determine if there are any vulnerabilities in your business or website.

With these tactics working in unison, your e-commerce store will be more secure and impervious to fraudulent activities than ever before.

High Risk Payments Recovered Post-Payment

High Risk Payments Recovered Post-Payment

High risk payments represent a growing segment of online transactions with some dedicated payment services providers, specializing in a field that offers a premium for those that better manage the risks involved. Processing high risk payments successfully depends upon shoring the risk, obviously the more information the decisions are based on, will improve results. Recently FUGU has teamed up with such payment processor to do precisely so.

In the current state of affairs the only way to shore the risk presented by high risk payments is by creating an Authorization Hold that insures the availability of the funds but does not defend against chargeback. The main form of shifting liability is through 3D Secure a costly process in every aspect, denying more than 15% of all transactions, creating more friction than needed to achieve better results.

In this case, FUGU is working with the payment gateway and presents the Auhtorization Hold and captures the hold sum automatically. The transaction is moved from the churn zone to the collaboration zone, as FUGU continues to communicate with the customer, getting to know more while collecting evidence against dispute including a full KYC process (see below).

After the payment, when the customer is most collaborative, in cases of high risk, FUGU contacts the payer with different forms of evidence validating the transaction. Using the following methods in various configurations, FUGU reduces denials by 70% and more:

These methods offer additional insights:

Sign & Approve

Customer receives a receipt for signature that is very familiar:

  • Validate mobile number
  • Measure cooperation
  • Device signature
  • Match IP and GEO –Location

Request a Selfie

Customer receives a request for a single use of the camera to confirm identity:

  • Save as representment
  • Validate mobile number
  • Measure cooperation
  • Device signature
  • Match IP and GEO –Location

Request ID Scan

Customer is asked to submit a picture ID as a form of identification:

  • Save as representment
  • Measure cooperation
  • Device signature
  • Match IP and GEO–Location
  • Match Selfie with ID face

Ask for Credit Card Scan

In extreme cases, customer may be asked to submit a scan of the credit card:

  • Save as representment
  • Measure cooperation
  • Device signature
  • Match IP and GEO –Location
  • Match First & Last Digits


In the unfortunate event of a dispute, all evidences are available with a click of a button

  • Selfie image
  • ID scan
  • Selfie ID match
  • Credit Card scan