A smarter way how to prevent fraud on Shopify Fraudjudge 31 May, 2022

A smarter way how to prevent fraud on Shopify

In 2022, Shopify is still one of the best e-commerce platforms to build and launch your store on. It offers a rich environment with many features that both technical and non-technical entrepreneurs from all over the world appreciate. With its support of integrations with various social media and online marketplaces like Amazon and Ebay, Shopify is truly an excellent choice for people who are looking for an all-in-one e-commerce platform. 

Yet, entrepreneurs are not the only people who are allured by the benefits Shopify offers. Traditionally, fraudsters of all kinds are allured to the popular web platforms too, precisely because they attract a lot of traffic, which makes fraud attempts statistically more likely. Shopify is not an exception. Fraudsters are especially fond of targeting growing businesses due to the changing and sometimes outright chaotic nature of their internal processes. 

The Shopify team has done an excellent job of laying out in this article the basic steps every store owner can take to reduce the chance of being scammed. 

However, going through all of these steps manually will be daunting, if not impossible. You might be ok with manual processing when you have 1,000 orders per month. But when it will grow to 10,000, 100,000 orders per month?! That’s exactly what fraudsters are counting on – that you will be overwhelmed by all these manual steps you now have to take on flagged orders and will just process everything as is, hoping that in the end, everything will be fine. 

But does it really have to be this way? Could there be a smarter way of preventing fraud, without adding too much administrative overhead?

We believe there is one and it’s called “behavior-based analytics”. 

Using a behavior analytics system, you can collect data about the previous orders your users have placed and detect any suspicious customer behavior patterns in the split of a second. Upon detecting a suspicious order that is misaligned with the previous behavior of the customer, you can also preconfigure different scenarios for handling this order that will be executed automatically. 

For example, you can make an IP address verification manually, to detect the unusual distance between IP addresses, the use of a proxy server, or other IP masking services. It’ll take you approximately 2 minutes per order to do so. If you have just 100 orders per day, it’ll eat up approximately 30% of your working day just to do this manual processing. Not the most productive use of your time. 

With an automated behavior analytics system, that is integrated with open and commercial IP databases, you can process 100, 10,000, or even 100,000 or more orders per day and it will take you less than 1 second per order. Moreover, with an automated system, a lot more sophisticated scenarios are possible. For example, screening the IP against paid malicious IP address databases, tracking the historic login and order patterns of each customer, defining the area of activity, and then comparing the distance of the current IP from the usual area of activity, and so on. All of this would be too time-consuming to calculate manually, yet for an automated behavior analytics system, it’s a 1-second task. 

With an automated behavior analytics system, billing and shipping address matching also become an instantly completed task, regardless of the order volume. An automated behavior analytics system, if used by multiple users at once, allows seamless cooperation and data sharing between users, so the internal database of confirmed fraudulent addresses, users, cards, and IP addresses grows as more and more stores are using the system to analyze their orders. Similar to law enforcement agencies cooperating with one another around the world, sharing the data and thus making it more likely to track and arrest criminals, data sharing between users in a behavior analytics system allows for more effective fraud mitigation. 

There is a lot more that can be done with a behavior analytics system in place, but the best way to really learn more about the automation of fraud prevention using behavior analytics is just to try one of such systems yourself. 

Our flagship product, Fraud Judge, is a great fraud prevention tool for businesses of all sizes – from small, startup stores, to rapidly growing mid-sized and even large stores. Fraud Judge provides you with easy access to a sophisticated behavioral analytics system on the back-end, that offers you a lot of customization options and the necessary sample configurations to get started. We even offer a free plan for you to make sure that Fraud Judge brings value to your business before you buy it!

You can install Fraud Judge and start testing it immediately via this link