To complete our series of holiday tips for ecommerce, we interviewed our own fraud guru, John Brown. As a Solutions Consultant here at NS8, John is our resident expert on fraud prevention and keeping stores safe. Here are a few of his tips on what you can do to keep fraud from ruining your holiday season.
How prevalent is fraud at this time of year?
Honest answer? Very. While companies are busy dealing with increased volume, the bad guys try to take advantage of their distractions. Studies suggest that both ad fraud and transaction fraud jump significantly during holiday sales, especially over the Black Friday/Cyber Monday weekend. And because companies are often busy with other preparations, they can overlook their fraud prevention plans and lose money to these schemes.
Are certain ad campaigns more prone to fraud at this time of year?
There’s not a lot of data to know for certain since so many companies are still blind to ad fraud in general. But companies should be keeping an eye on retargeting campaigns during the holidays. These campaigns generally get more expensive around now because consumers are in a buying mood. With an easier audience, it becomes more important than ever to give reminders of your brand and your products.
The fraudsters know that too, so they’ll target these types of campaigns. The good news is that NS8 users can block fraud and bad traffic from their retargeting campaigns with our Google Analytics integration.
What tips do you recommend to reduce potential transaction fraud?
Balancing fraud risk at high-volume times can be a difficult task. More transactions means more opportunities for fraud to penetrate your defenses. But there are a couple of things you can do to minimize your risks.
First, utilize verification tools. While it may seem problematic to add friction into your buying process when people are known to make purchases, the truth is customers appreciate stores that protect them. Simple verification will cut out a lot of fraudsters who will move on to easier prey and make real customers feel like your brand is more secure.
Second, look for ways to automate rejections and approvals. For example, NS8 Protect users can set order rules that cancel orders with poor EQ8 Scores and approve orders with high EQ8 Scores. This allows those businesses to focus their attention on just the orders that need the most scrutiny. These order rules can even be changed to manage your specific risk on particular days, so you can have a higher risk threshold on Black Friday and a lower one on Cyber Monday. Tools like this will make it easier for you to find fraud hiding in your sales.
Are there general risk factors to watch out for?
To start, remember every store is different. That means something that is common for another business may not affect you at all. With that being said, there are a few things in general to watch for.
As mentioned, retargeting fraud is popular at this time of year, as is click and impression fraud on the advertising side. Keep an eye out for repeating patterns or a spike in bad traffic to alert you to campaign issues.
On the transaction fraud side, credit card fraud is going to be the biggest issue. Requiring CVV codes, using verification tools, incorporating behavioral analytics, and setting up other fraud defenses will significantly help you reduce chargebacks and fraudulent orders.
What else can be done to limit fraud during such a busy time of year?
Knowledge is power. Understanding what types of fraud are most common for your industry, and specifically your business, can help you better protect yourself from these issues. Take the time to look over your analytics to determine if there are shared traits between suspect orders and find ways to protect against those attributes.
For example, if you know that many of your fraudulent orders come from universities with free WiFi, you can set a rule to send out SMS verification for any orders initiating there. Or, if most of your customers are from the US, you can set stricter verification or manual reviews for orders coming from other countries.
The key to limiting fraud will be creating a plan in advance. The more you do ahead of time, the less time you’ll spend dealing with problems as they crop up.