Warning Signs of Fraud - THE SALE - Electronic Commerce 101 - Making Sales on Your E-commerce Website

The following are some basic flags that should warn you of potential fraud. Please note that if any of these flags are raised, that does not mean the order is fraud, just that the order requires more investigation to verify whether or not it's real:

Red Flags:

• Customer wants to pay using more than one means of payment(multiple credit cards, credit card and check, multiple money orders.

• Order is from Nigeria, Indonesia, or surrounding countries.

• Order is abnormally large in both dollar amount and quantities.

• Billing and shipping addresses are different countries.

Yellow Flags

• Order requests overnight or expedited shipping. Thieves want the merchandise ASAP before the merchant can become aware of the fraud. If the customer is completely unconcerned about cost, then it's a Red Flag.

• Billing and shipping addresses are different states.

• Requests to have order delivered to a different person than who ordered it. If it's being delivered to a different name at a different address, then it may be a Red Flag.

• Shipping address is border or port town and not the billing address. That means the address may be an international shipper, shipping the order out of the country.

• Phone number does not fit billing address, i.e., address in one state, area code from phone number is a different state.

• A customer pushes for the order to be shipped by a particular shipper, and seems too desperate to get the tracking number for their order. One means to commit fraud is to have the order shipped to the correct billing address for the credit card, and then use the tracking number to contact the shipper and have it forwarded to a different address. Always add, if possible, not to forward the packages from their original address.

Requiring that orders be shipped only to the billing address will prevent a lot of fraud attempts, but will also lose you a lot of sales. Many people like to have orders shipped to their job or other local places where they know someone is available to receive it.

Shipping to an address that is not the billing address almost always means you will lose a chargeback claim if the owner of the credit card disputes the charge. You can require people to add the address where they want the order shipped to their credit card. Credit card companies allow their card customers to add verified addresses in addition to the billing address, but you may also lose sales from people who don't want to be bothered with the added work, particularly if it's a small, low cost order.

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