With the proliferation of online shopping, e-commerce can be labeled as one of the biggest sectors in online business. The e-commerce sector witnessed a significant increase in sales over the last decade, accounting for 18% of global retail sales in 2020, and this number is further projected to rise to almost 21% by 2024. As the e-Commerce business industry charts the upward trajectory, the need for businesses to innovate and prioritize online operations to improve shopping experiences and mitigate frauds also increases.
As the popularity of online shopping grows in the retail industry, so does the opportunity for cybercriminals and unethical consumers to scam online businesses. Faisal Abidi’s team at RNF Technologies understands that retailers will have to embrace a wide range of scam prevention protocols and tools to reduce the chances of becoming victims of frauds and scams.
To dodge the potential scams involved in e-Commerce, it is crucial that you are wary of them and the malicious intentions of threat actors.
Why is e-Commerce Susceptible to Fraud?
Undeniably, e-Commerce has changed how businesses operate today. Not only has it become a platform to foster growth and generate revenue for existing businesses, but it also opened up new opportunities for thousands of new businesses. While setting up an online store might seem relatively easy, e-Commerce frauds are among the most lucrative ventures of cybercriminals.
The vulnerability of e-Commerce retailers can be primarily attributed to a number of factors, most of which are beyond their control. One of the most common pitfalls associated with e-Commerce scams is the ease of access, coupled with the lack of understanding. Since most transactions involved in e-commerce are digital, it becomes easier for fraudsters to steal their credit card information.
Furthermore, if e-commerce retailers were truly cognizant of the ramifications of such fraudulent activities, they’d be far more keen on developing effective strategies. Another factor that contributes to the susceptibility of online merchants is the multi-channeled nature of the e-Commerce industry and the prevalence of big shots such as Amazon and eBay, which increase the chances for scammers to infiltrate transactions.
What is the Impact of e-Commerce Fraud on Retailers?
The consequences of e-Commerce fraud can transcend way beyond the loss of revenue of the company. In many cases, online frauds go undetected, which means that scammers feed onto the retailer’s websites, rendering their traffic and customer metrics unreliable. A successful fraudulent attack can also wreak havoc on the company’s reputation in the industry, ultimately leading to a loss of revenue and resources. Not to mention, frauds can sabotage the relationship between the customers and the company, reflecting badly on the organization.
At RNF Technologies, we partner with e-commerce businesses to help them grow their online reach and visibility; acknowledging that shopping patterns change continuously, the company uses a combination of legacy fraud prevention approaches, as well as the latest technologies to keep the digital assets of their clients safe and up-to-date with security protocols.
How to Evade Common Scams Faced by Online Merchants?
Frauds in e-Commerce have substantially increased over the past few years. In fact, according to a report, e-Commerce retailers deal with an average of 206,000 web attacks per month, and successful monthly fraud attempts increased by 43% to 48% for mid-to-large retailers and 27% for smaller retailers in 2020. Needless to say that these alarming numbers should suffice to jolt your business sensibilities and bring you to terms with the fact that e-Commerce fraud is a genuine concern for most online merchants. This further alludes to the urgency of dealing with the issue, but before this can happen, retailers must be aware of how to deal with it.
Here are the most common ways you can deal with scams associated with e-commerce.
Maintain PCI Compliance- According to the PCI Compliance Guide, companies that process, store, or transmit credit card information are liable to maintain a secure environment for their consumers and comply with the Payment Card Industry Data Security Standards (PCI DSS). PCI is essentially designed to safeguard the customer’s credentials such as account number, expiration date, name, address, social security number, etc. While most SaaS e-commerce platforms already offer these features, do double-check to confirm that you’re safe.
Do Not Store Sensitive Customer Data- Generally, the PCI standards prohibit online retailers from storing customers’ sensitive data, particularly their credit card numbers, expiration dates, and CVV. However, if you have this data stored in your database, make sure that you get rid of it and retain only the information that you might need for facilitating refunds. Storing other information such as the customer’s social security number, CVV2 might run the risk of cyber hacking attempts. After all, scammers won’t be able to trespass your database and steal customer information from you when you don’t have it in the first place!
Use Tracking Numbers for All- Using tracking numbers against all your orders is one of the best ways to protect your business from chargeback frauds. Chargeback fraud is when a customer requests a refund from the merchant, which is forcibly initiated by the issuing bank. Additionally, as a merchant, you might have to pay the transaction fees for the removal of fraudulent funds from your account. This essentially happens when the merchant is held responsible for either never delivering the product or delivering a damaged item. But if you use tracking numbers, you have the confirmation that the product was delivered to the customer.
Regardless of the looming fear of scams and fraudulent activities, building a strong online presence is crucial to thriving in the dynamic business world. At RNF Technologies, we strive to transform clients from using traditional retail methods to using our modern & responsive e-commerce website development.
With a skilled team that’s well-versed in identifying fraud patterns in digital environments, the company takes a multi-pronged approach to fight this growing menace. If you are looking to take your small business to new heights with the most interactive eCommerce apps for your users that fit right in with your business requirements, get in touch with RNF Technologies.