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Prevent Fraudulent Orders

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If you manage an online store, you no doubt have had to worry about fraudulent orders at some point. Online payment companies such as Paypal will do everything they can to prevent you from becoming a victim of fraud, but ultimately much of the risk management and fraud prevention has to fall on you. Here are some tips that will help protect you and your business from fraudulent orders.


Pay Attention to the Shipping Address

In some cases, simply paying attention to a company’s shipping address is enough to prevent fraud. The safest orders are those in which the shipping address and billing address are the same, or at least very close together. If a shipping address is more than 45 miles away from the billing address, you might be dealing with a fraudulent order. This is often the case if someone is using a stolen identity to make their purchase. You should also question any orders that are to be sent to freight forwarders, P.O. boxes, or properties that you know to be vacant. There will certainly be some legitimate orders that are supposed to go to places like these, but looking at them with a critical eye is a good risk management strategy.


Beware of Strange Email Addresses

Even though any combination of letters and numbers can be made into an email address, there are some addresses that seem more legitimate than others. Most real email addresses look like they mean something, even if you have no way of knowing what that something is. On the other hand, fake email addresses usually look like a random collection of letters and numbers that don’t spell anything. Scammers will often create these addresses solely to place a fraudulent order, so watch out for them.


Watch Out for Large or Frequent Orders

If a regular customer suddenly makes an unusually large order or places a large number of orders, it is possible that they’ve fallen victim to identity theft. If you can check in with that customer in any way either with a phone call or via email, do so before sending out the order to make sure that they placed the order.

This also applies to a large number of orders being placed at odd times. Most people aren’t doing their online shopping at 3:30 in the morning, so it is is possible that the order is actually coming from a scammer in another part of the world.


Rush or Overnight Shipping

While there is nothing wrong or even that unusual with a customer who wants rush or overnight shipping, it does look suspicious when it is combined with some of the above-mentioned red flags. Fraud prevention is much more difficult when the order is completed and the merchandise has made it to its destination, and scammers know this. They will try to receive their goods quickly so they can disappear from your radar as soon as possible.


Verify Every Order You Receive

The single best way to prevent fraudulent orders is to verify every purchase that is made from your online store. You should know who is placing the order, where the order is going, and that the order can be paid for. Most of the orders you receive will be legitimate, but there will be at least a handful that will be bogus. Spotting these orders can be difficult, so stay vigilant for your sake and the sake of your clients.

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