After countless sleepless nights and weekends, you finally went live with your dream store on Shopify. No doubt, it’s an important milestone for you, and cheers to that! At this moment, it is time to sit back, relax and enjoy the fruits of your hard work, right? Well, not exactly.
Among the new store owners, it’s tempting to think that launching a store marks the end of entrepreneurial struggles. But in reality, your struggles are just beginning after launching the store. As you will soon discover, particularly if you’re selling premium and expensive products, not all orders are as genuine as they seem. Fraudsters are especially keen to target stores that sell premium goods, because of their high resale value.
That’s how fraudsters make money, after all – by stealing goods from you through fraudulent purchases made with stolen credit card data and then reselling those goods privately in the secondary market. Recent liability shift of the payment networks from merchants to the issuing banks for credit card transactions that were authenticated using the latest 3D Secure protocol helps mitigate some chargeback risks, but still can create unnecessary hassle and keep your working capital stranded in disputes for weeks to come if goods were already dispatched. It’s always better to validate the order than go through the lengthy dispute resolution process.
In one of our previous articles, we’ve outlined the basic steps store owners can take to protect themselves from fraud, based on Shopify’s recommendations and our experience of automated fraud prevention. However, there are some orders that might raise suspicions, yet they cannot be undoubtedly classified as “fraud” by an automated system.
For example, you’re selling premium jewelry that has a high resale value – a perfect target for fraudsters. Let’s say you have a customer that ordered a necklace 6 months ago. Then this customer was inactive for the last 6 months and suddenly an order comes in for 5 identical rings and the order is paid for from a different credit card than which was used in the previous purchase. The quantity of order and the change of payment method does not necessarily indicate that the order is fraudulent, but certainly, raise some suspicions.
That’s where customer identity verification comes into play.
Perhaps, someone created a new account in your store, using a fake identity, and made a small test purchase to learn more about your fulfillment process and also to establish some familiarity, to appeal to your internal fraud prevention as an “existing” customer. Then, after waiting it out for 6 months, the fraudster behind this account is finally making the move.
Cases like this are what customer identity verification was developed for. Before fulfilling an order like this one, you might want to verify that this customer is who he/she claims to be. Shopify advises just calling the customer and asking additional questions about the order, such as specifying the delivery address over the phone, etc.
There are two distinct problems with the manual approach, however: 1. Not every employee is able to handle challenging conversations like that over the phone, and 2. Making a personalized call on each suspicious order is simply too ineffective.
It’s better to automate this part of the screening process. That’s why we have included ID verification features in our Fraud Judge plugin – these features allow you to streamline your customer identity verification process by requesting a valid Government ID, a Selfie and a proof of address via utility bill. Store owners can decide, which mix of these customer identity verification features to use in their screening process. Customer will then be prompted to provide the requested information, in order to proceed with the order fulfillment. Upon receiving the information, your employees will be able to approve or reject the order, based on the provided information. No stress and no challenging conversations.
If this sounds reasonable to you, then you should definitely try Fraud Judge app for your Shopify store! We even have a free plan to let you try our solution with the lowest investment possible.
You can install Fraud Judge and start preventing fraud now via this link.