As smaller-sized businesses are increasingly becoming the target of fraudsters, there are steps that they can implement to detect fraud and protect their business
Parsippany, NJ (PRWEB) December 15, 2011
Dydacomp, a leading provider of business technology platforms for small and mid-sized eCommerce and multichannel merchants, today announced best practices retailers can implement to more closely monitor their inventory and safeguard their revenue from the expanding threat of fraudulent online orders. According to the 2011 CyberSource Online Fraud Report, more than one percent of all online transactions are potentially fraudulent orders which could equate to a significant impact on revenue and inventory.
Like a major data breach, fraudulent orders not only impact the bottom line but can also severely damage a retailer’s brand. Fraudulent orders deplete inventory and force merchants to be hyper vigilant with their ordering processes – resulting in less product available and a hassle for customers. Additionally, most card-issuing banks will side with the consumer, whose card data was used in the transaction, and refund them. But the merchant will not receive compensation for loss of inventory or revenue.
“Out of the $4 billion that our clients process on an annual basis, an estimated $48 million is at risk to fraudulent orders. In addition to this lost revenue and inventory, merchants suffer brand damage, which can be more costly in the long run. This is why we’ve focused on fraud protection in our latest version of Multichannel Order Manager,” said Fred Lizza, CEO of Dydacomp. “As smaller-sized businesses are increasingly becoming the target of fraudsters, there are steps that they can implement to detect fraud and protect their business.”
According to the CyberSource report, large online merchants protect their businesses daily from fraud by using up to eight automated and manual tools to detect and prevent fraud. But small businesses lack the resources in capital and human resources to implement those same mechanisms. The following best practices can help minimize vulnerabilities and reduce fraudulent orders:
- Activate fraud prevention tools in the payment process and back office systems and create processes to review those orders that contain certain indicators of fraudulent activity.
- Require card identification (CID) information – the extra three or four digits used for security on all credit cards – and address verification on all orders paid by credit card. Doing so typically ensures the buyer actually has the card in his hand and is shipping to the address associated with the card holder. Where it’s a separate ship to/gift to address, collect bill to address to verify authenticity.
- Review past orders that have been fraudulent to identify the themes that are specific to your business.
Small businesses should also look closely at orders that contain any of the following to prevent fraud:
- As electronics are the number-one products associated with fraud, review all electronic category orders.
- Review orders shipping internationally.
- Search for orders without a CID number or a CID that doesn’t match the credit card number.
- Orders that are significantly larger than the average order size.
- First time buyers.
- Overnight requests.
Dydacomp solves the business automation and order management needs of eCommerce, catalog, DRTV, and traditional point-of-sale businesses worldwide. Since 1986, nearly 10,000 companies have relied on the Multichannel Order Manager (M.O.M.) solution to streamline processes, increase efficiencies and boost revenue in areas such as inventory control, order entry, customer maintenance, credit card processing, list fulfillment, shipping and more. Through its open API, M.O.M. connects to virtually any eCommerce platform as well as SiteLINK®, the company’s cloud-hosted eCommerce solution. With M.O.M. and SiteLINK, SMB clients manage over a million online shoppers daily, nearly ten million in gross merchandise sales every day, and optimize over $4 billion in inventory. Dydacomp’s solutions provide them with the keys to drive business growth. For more information, visit http://www.dydacomp.com.