Ecommerce Fraud Prevention Solution
While digital marketplaces evolve, the industry requires more effective ecommerce fraud protection and detection solutions to prevent losses and boost customer loyalty.
Ecommerce fraud has become a huge issue for both startups and well-established online projects. Every company seeks best practices to keep their customers and businesses safe. The challenge is becoming tougher, as fraudsters evolve making online transactions more vulnerable than ever before.
Also known as a payment scam, ecommerce fraud represents an illegal act with the fraudster’s goal of making financial or personal gain. Criminals apply a range of techniques aimed at stealing credit card numbers, billing addresses, and other sensitive data.
The main problem here is that scammers can now steal money from not only potential clients but also merchants. While experts predict the total value of global ecommerce to exceed $6 trillion in 2024, having an effective fraud detection solution is vital for online vendors and merchants.
What Makes Ecommerce Fraud So Common?
The rise of ecommerce fraud can be explained not only by a lack of fraud detection tools. As stated earlier, scammers evolve and develop their fraudulent techniques. They can find many sources to pick up new scamming skills as well as motivation to commit ecommerce fraud.
The most popular reasons why fraudsters are involved in this particular type of illegal activity include:
- Lacking fraud prevention solutions. When not having an effective ecommerce fraud prevention solution, merchants make it easy for fraudsters to interfere. Business owners often underestimate the importance of baseline fraud prevention tools like secure payment verification (2FA, CVV card and address verification, etc.). It reserves enough room for scammers’ maneuvers.
- Stolen or Insecure Credentials. Customers and merchants are responsible for keeping their sensitive data safe. Weak passwords, phishing attacks, poor website security, and other issues can lead to red flags that are associated with stolen credit card information, account takeover, and other types of activities that refer to ecommerce fraud.
- Ecommerce Evolution. While the industry evolves, we may see new advanced services arising. For instance, cross-border (international) transactions are riskier compared to domestic operations.
With all those reasons in mind, we should also consider evolving fraudulent techniques. Scammers develop new and more efficient approaches to interfere with users' sensitive data. So, businesses must establish safe and efficient ecommerce fraud prevention strategies using advanced and up-to-date solutions.
Consequences of Ecommerce Fraud
According to Statista, the industry lost around $41 billion per year because of ecommerce fraud only in the United States. Global losses are much higher. This fact puts some fundamental implementations at risk. The world is approaching crypto and digital asset globalization.
Businesses will have to adapt to new requirements, which also means establishing effective ecommerce fraud prevention methods that will keep their customers safe in the face of financial digitalization.
To know, what merchants and clients are fighting with, let’s have a closer look at the most common ecommerce fraud types and the way they work.
False Refunds and Chargeback Requests
Also known as friendly ecommerce fraud, chargeback fraud happens when a client files a chargeback right after purchasing a product in an online shop. A scammer disputes a transaction with his or her payment processor for improper intentions.
Fraudulent chargebacks can result in extra expenses for businesses as well as increase further risks and associated costs triggered by friendly fraud. This particular type of ecommerce fraud accounts for 34% of all scamming methods across the globe.
Gift Card and Coupon Abuse
Online shops use promotions to drive more customers. Businesses launch various campaigns, loyalty, and affiliate programs aimed at increasing their revenues. However, the more promotions are launched, the higher the chances of loyalty ecommerce fraud. Scammers apply several common tactics:
- Promo fraud. Promotion abuse is one of the most common issues for digital merchants. All scammers need is to detect a loophole in a promo campaign and claim their free products. They do not even have to perform an account takeover or identity theft. Merchants give scammers everything they need.
- Loyalty fraud. The idea is to use a stolen credit card. These credentials are further used to join company’s loyalty programs, earn points, receive gifts, and so on.
- Affiliate market fraud. Affiliate marketing is a popular tactic to bring more online customers via advertising networks. However, no one would ever guarantee an underlying affiliate is not blending the rules. They often use spam traffic or bring referred clients that are not legitimate.
Card Testing Fraud
Let’s say, you’ve found a lost credit card. What would you do? Probably, you will try to find its owners and give the card back. Oppositely, fraudsters will first check if the card is valid or has cash on it. The idea is to make a small-value transaction to see how it goes. If the card still works, scammers make more serious purchases.
This type of fraud brings greater risks, as it affects both merchants and clients. Scammers use major ecommerce platforms like Amazon to list company’s products. When a client tries to buy it, he or she provides valid credit card information that is later used by fraudsters to purchase a real product.
On the one hand, customers receive what they bought. However, the main problem is that they have their credentials compromised without even knowing it.
JuicyScore Fraud Prevention Solution for Ecommerce
There are many other types of illegal techniques businesses need to promptly detect and prevent. This is why the role of an effective ecommerce fraud protection software should never be underestimated. JuicyScore is your ultimate anti-fraud ally. It is a comprehensive fraud prevention solution designed with ecommerce platforms in mind.
It incorporates the most advanced fraud prevention technologies that can be applied across various ecommerce sectors. The software comes with an extensive technical toolkit that automatically detects different types of ecommerce fraud letting businesses not only reduce losses and operation costs but also boost customer loyalty.
Fraud Detection with Machine Learning
JuicyScore delivers a complete toolkit for combating ecommerce fraud. The software was created to help digital platforms stop fraudsters head-on. Based on AI and ML algorithms, it guarantees cutting-edge protection strategies across different business verticals.
This is what our ecommerce fraud protection comes with:
- AI-Based Algorithms for Recognizing Various Forms of Fraud. The software uses hundreds of different device authentication parameters to create an accurate end-user profile based on a variety of behavioral and tech data variables.
- ML-Based Techniques to Lower the Risk of Fraud. Potential threats are automatically detected. To calculate technical metrics, the system incorporates 214 settings, attributes, and device-assisted indicators. They cover the quality of the network infrastructure, the Internet connection, and other factors that are carefully considered and evaluated.
Leverage Broad Vector of Data
Our premium data vector's key component is cutting-edge technology. Businesses get an all-in-one toolkit for detecting and preventing ecommerce fraud.
As a result, we create an adaptable assessment model using the sophisticated JuicyScore data vector. It helps ecommerce platforms get enough data to assess client account trustworthiness and transaction safety. It is designed to make decision-making easier.
As a digital safety advisor, the software is provided as a component of a larger anti-fraud prevention toolset that includes algorithms to detect device manipulation and randomization. It outputs values based on scoring models. Using authentication tools, the system automatically does extensive tracking.
The system is able to identify fraudulent activities, including stolen credentials, data randomization, device virtualization, and multi-accounting.
JuicyScore was designed to help companies prevent credit card, chargeback, promotion, loyalty, and other types of ecommerce fraud. We use tools to protect client data through improved encryption and multi-factor authentication.
Our approach applies a variety of data sources to reduce the risk of fraud. It produces the fundamental behavioral and technical characteristics required to build a comprehensive digital profile, automatically assessing any possible cyber threat.
JuicyScore can identify a possibly fraudulent transaction in a matter of seconds. To guarantee improved decision-making for ecommerce, it generates "red flags" anytime an anomaly is detected.
Our solution processes numerous basic and secondary ecommerce fraud risk parameters. The methodology is based on monitoring various device attributes.
JuicyScore data vector determines the type of carrier (tablet, desktop, laptop, or mobile), screen size, display quality, RAM, and other critical features in order to effectively perform fingerprinting.
As a result, the system displays anomalies or potentially malicious transactions. These might show randomization or cloning of devices, remote access, different routing techniques, and more.
Virtual User Risk Assessment
The system combines a range of aggregated variables to process various parameters. These include the number of apps that are used on the same device within a given time, devices that are duplicated or selected at random, devices that are subjected to online session analysis, dwell/flight times, average typing or content reading speeds, and other important behavioral metrics.
A solid informational background involves a set of integrated markers generated within the data vector. When combined, they offer ecommerce companies a single tool for spotting potentially risky consumer categories.
How Our Solution Works
The system uses filters to categorize high-risk flows according to device characteristics (OS, browser version, quality of Internet connection, behavioral features, etc.) into niche-specific groupings.
JuicyScore enables businesses to assess every user attempting to finish a particular transaction. Organizations eventually develop a more sophisticated financial risk model with significant informational value. Ultimately, companies might create an inexpensive risk-assessment method that reduces overhead, boosts loyalty, and fosters trust.
The most effective data source to stop ecommerce fraud is a combination of device authentication mechanisms for device fingerprinting output data properties. When deciding whether to approve or reject a transaction, digital shop owners will have access to an accurate profile of the device's attributes as well as tech and behavioral signals that guarantee sound decision-making.
JuicyScore enhances ecommerce fraud protection by considering different factors when making authorization decisions. An access request's context offers a more thorough understanding of the circumstances.
For instance, since more clients want to buy a product online, businesses need to look for scammers trying to access their systems with stolen credentials. When determining authorization, additional factors help detect fraudulent activities at the stage of authorization.
A crucial part of ecommerce fraud prevention methodology is a correlation between tech and behavioral characteristics. The system uses a mix of aggregated variables to examine various parameters, such as:
- Gadget frequency refers to the number of apps utilized on the same device, duplicated or randomly assigned devices, etc. within a specified time period.
- Behavioral metrics include dwell or flight time, online sessions, average typing or content reading speed, and dwell or flight duration.
JuicyScore is a high-performing anti-fraud solution. It automatically processes huge volumes of data in real time. This fact ensures high-speed profiling and device fingerprinting. Numerous integrated markers are included in the software’s data vector, which functions as a single aggregate. Business owners are able to identify high-risk customer groupings that may perform different types of fraudulent activities.
Get Started with JuicyScore Today
Establish an effective anti-fraud strategy for your ecommerce project with JuicyScore. Simply complete the following steps to get started:
- Install JavaScrip (web) or the SDK (mobile) for your digital platform.
- Configure the system to your specifications.
- Begin processing essential data to spot and prevent ecommerce fraud.
JuicyScore's solution will ensure the company's safety and a positive customer experience. Get in touch to book a demo.
What Is an Example of Ecommerce Fraud?
Promotion fraud is the most popular example of ecommerce fraud. It involves gift cards, loyalty, and affiliate abuse when scammers try to benefit from campaign’s weak spots and get a product for free.
How Big Is Ecommerce Fraud?
Only in the United States, ecommerce fraud made businesses lose around $40 billion. While the industry is about to reach a global value of $6 trillion in 2024, companies worldwide may lose billions per year without having effective fraud detection solutions.
Is Ecommerce High Risk?
Ecommerce is at higher risk than ever with the evolution of digital assets and global adoption of online payment infrastructure. It reserves enough room for scammers to perform various fraudulent techniques.
How Is Ecommerce Fraud Detected?
A systematic anti-fraud approach is required. Businesses should develop a multi-vector protection solution to consider various types of threats ranging from stolen credentials and credit card info to triangulate ecommerce frauds. This is where device fingerprinting, authentication, and enhanced authorization techniques might help.