The Christmas shopping period is a huge opportunity for online retailers, but it can also stretch the capacity of a business to its breaking point. If you’ve already made your eCommerce business Christmas-proof you’ll be well placed to maximise your sales over the period, but beware: Black Friday and Cyber Monday mark the busiest period of the year for online scammers and fraudsters, and they’re aiming their sights at small-to-medium retailers just like you.

Fraudsters know that they’re most likely to get away with their crimes when a business is operating at or beyond full capacity, when details can get overlooked and warning signs missed. A large order at Christmas doesn’t seem all that unusual, so it is hard to identify the real from the fake. In this article we’ll discuss the methods that you can employ to find the phoneys

How it works

If you’re an honest, law-abiding citizen then spotting a scammer or a fraudster may not come naturally. The people who try to scam you have much more experience in deception than you. Even if you’re an observant person with a good eye for detail, experienced con artists operate in a manner which will rarely see them apprehended.

Stealing a person’s identity and/or financial details is frighteningly easy. A snatched wallet, a card cloner, scam phone calls, discarded letters in rubbish bins and the dark web can all provide the key to unlocking personal details. Some scammers simply buy personal details and card numbers in bulk from the internet version of scammer wholesalers. This is an industry in its own right.

Once the scammer has the card details they will use the card on as many websites as possible in as short a time as possible. The testing ground for these cards is often on charity websites as they tend to have less stringent security checks. Once the card has successfully made payment to a charity without incident, the spending spree can truly begin.

This is the point at which you will encounter fraudsters and the point at which you can nip their crime in the bud. These crimes are committed remotely under a false identity and for this reason they are relatively difficult to investigate. Losing a three or four figure sum might make or break you, but isn’t always the most productive case for the Police to pursue. That leaves it up to you to identify the fraud before it happens.

Detect the scam

• Scammers tend to shop in the early hours. If your customers are shopping at 3am they could be insomniacs or enjoying a post nightclub shopping spree, but they might also be fraudsters.
• Phoney orders usually have alternative shipping addresses. It may be a direct-to-receiver gift, but it is worth checking.
• If the delivery address is to a block of flats it makes it easy for scammers to pick up the parcel either by waiting outside the property or by banking on the delivery person to simply dump it in the foyer.
• Email addresses that have no resemblance to the name on the card may be another indication that the person ordering is not the cardholder.
• Check the phone number on the order. If you’re suspicious give it a call. Scammers rarely give real or current phone numbers.
• Fraudsters often test the water with a small order and, if successful, follow up with a much larger order with better resale value. This then turns into a pattern of repeated larger offers as the scammer returns to the same well again and again.
• Scammers order by next day delivery. It isn’t their money so they don’t mind paying more, and next day delivery means you have less time to check it.

How much?

Now that we know how to spot the scammers let’s talk a little about what online fraud costs you. These costs can be difficult for a smaller company to absorb so you need to be aware of just how badly these cheaters will hurt your business. Firstly, you lose the cost of the goods and the cost of shipping them. For next day delivery, that shipping cost could ben as high as £5-8. You lose the money as the bank will process a chargeback and the money will be taken from you.

You will also be charged a ‘dispute administration fee’, which will cost you anything from £10-25. Lastly, you will lose the most precious thing of all - time. As a smaller retailer you need to spend your time wisely and dealing with lost money is furthest thing from a profitable way to spend your time.

What should I do?

If you have suspicions about an order then don’t delay – investigate immediately. The first step is to call the number on the order. Emailing can waste time and you won’t get a reply from fraudsters anyway. If the number is dead or the person can’t remember basic facts about the order then you have a scammer on your hands. If the call simply goes to voicemail, now is the time to send an email. Simply state that the person needs to call to complete a few security questions before you can despatch what they have ordered. If they don’t respond within a few days simply cancel the order.

These steps won’t make you fraud proof but they should help you to eliminate the bulk of fraudulent orders. If you are the victim of fraud do report the incident to Police. Even though a thorough investigation may not be completed in the short term, cases can sometimes be linked retrospectively when the scammers’ criminality catches up with them. Refund the card immediately. Doing so may help you to avoid extra charges from the bank.

Heeding this advice will help you to weed out the scammers so you can have your most successful year to date. Be vigilant and enjoy a great build up to Christmas.