Although the vast majority of chargebacks are both innocent and easily prevantable, what’s left are the real bad apples of the bunch, the fraudsters & scammers looking to either make a quick buck off your hard work, get some free merchandise or destroy you altogether for nothing more than a laugh.
Things to take away from this episode.
- 1:50 Fraud is inevitable. Sooner or later, your store will come to the attention of a fraudster who will try to take advantage of you. If you sell big ticket items or get a lot of press, expect them sooner than later. No one avoids being targeted forever, so be prepared and don’t get caught by surprise.
- 2:15 A bank transaction is not a guarantee of security. Just because the bank pushed the purchase and charge through doesn’t necessarily mean their client and your customer has the money, or intention, to cover it. That money may be clawed back days later, at your cost, so don’t rush to ship the order or count your cash. It is your responsibility as a merchant to recognize fraudulent activity
- 3:40 Be mindful of your orders. You may be overjoyed to suddenly be doing tons of business, but check the details and make sure the transactions are valid so they don't come back to bite you. Make sure there are no red flags before processing their order.
- 4:30 Legitimate customers and fraudsters act differently. Both online and irl, pay close attention to the details and clues both customers and suspected frauds leave behind while browsing, in the checkout and even post-purchase, to learn how to spot and follow the trail that leads back to them.
- 5:30 If you’re making a profit, they can make a profit. You may find it hard to believe that your boutique or niche brand may be targeted by professional fraudsters, but your success just proves that there’s a market for your product, which means there’s a blackmarket too. Even if you’re a small business with no highly valuable merchandise to scam, they can hijack your checkout to test stolen credit cards with minor, often random purchases.
- 6:25 Where there’s one, there’s bound to me more. Modern fraudsters and scammers are members of vast communities barely hiding among the social media and message boards many businesses rely on themselves for promotion. When one finds a weakness in a store, they don’t keep it to themselves for long, so you have to move quick to protect yourself first.
Tools and tactics you can implement tomorrow to protect your store
- 8:20 The best offence is a good defence. Consider hiring an indemnifying fraud prevention company, someone who will take care of the entire process from top to bottom and cover any chargebacks that get passed them. If you prefer a more cost-effective and hands on approach, train someone on-staff to work with a third party security and monitoring system, or one of Shopify's own security apps and services (though with warning as these apps can be very basic and sloppy)
- 9:06 Make it obvious who they’re buying from. This includes on your credit card statement the part that shows up as “sp*http://yourstore.com”and can be edited in your Shopify admin under “/admin/settings/payments https://monosnap.com/file/x3hFgYMYaEhaWCuZPzKp4Dvq97YsEV“
- 11:38 Use common sense. Stay calm, slow down, and think about the purchases your customers are making. Paying attention is your first, last and best defence for fraud prevention, and by far the cheapest.
- 12:05 Watch your flank. If a scammers senses that you’ve caught onto them online, they may switch to a different approach, like ordering over the phone. Be aware of the signs of social engineering, and don’t be afraid to ask questions if you get...
