During the last years, many major retailers are offering in-store pickup and curbside pickup options for customers who shop online. This becomes even more important during the current COVID-19 pandemic to avoid shopping crowds and to offer higher safety and hygiene for the upcoming Black Friday week and Christmas shopping. Another big topic is fraud prevention and the threat of online fraud in Covid era.
Retailers offering this purchasing experience need to keep in mind that during last year fraudsters have increasingly targeted this online-offline combined solution to try to use payment card stolen credentials.
In this post, we give some of our fraud prevention best practices for online businesses to help you with keeping fraudsters away from your buy online & pick-up in-store business.
Why Click and Collect?
Even before COVID-19 impact on the e-commerce world, it was starting to be common to see major retailers offering the possibility to buy online and pick-up in-store as an option, to offer an additional customer centric-experience for customers which wanted to avoid shopping fees or which simply preferred to pick-up their goods at their most convenient time. Browsing online the chosen items, without encountering the risk of going to a physical shop and finding those out-of-order can be definitely another important aspect for many customers.
It can be an operational relief for many retailers as well, reducing the burdens on the online distribution, increasing the traffic to brick-and-mortar locations, offering up-selling opportunities in-store, and avoiding queues to traditional cashiers.
The benefits deriving from Click and Collect don’t come without their risks. One of the main risks can come from potential fraudulent orders and it might be crucial to have additional checks or a different risk management strategy as those orders might have less information than traditional ones, missing important data points such as shipping information.
4 Fraud Prevention Best Practices for Click and Collect
Throughout the last years, we have helped several European merchants in establishing a fraud management framework to avoid fraudulent orders for Click & Collect purchases. Below we list some of the key aspects to consider to keep fraudulent orders away from your business.
- Use advanced fraud rules for orders with the same payment methods or customer credentials.
- Common for classical online orders, fraudsters will try to make as many purchases as possible in short time frames
- Fraudsters might prefer to use different pick-up locations for those orders, a non-standard behavior for genuine customers
- Pay attention to the order activity and if there were several attempts, 3D Secure avoidance, and Strong Customer Authentication failed attempts, Issuer rejections, and any kind of data manipulation
- Leverage your available data points. Many additional key data points can be derived for your rules and your risk management models.
- Take advantage of consumer profiling by using device fingerprint to enrich your risk models
- Explore data enrichment for some key data points such as IP address, email addresses, social media information, and so on
- Account activity. There can be multiple signs of uncommon customer activity such as:
- Abnormal IP geolocation which might differ from previous historical ones
- Account age and Recent account changes such as password changes or email address changes
- High-risk products such as gift cards, luxury goods, and others. Especially if purchased in bulk
- Train your in-store team on how to securely handle the delivery of goods:
- Ask for customer identification and keep the right to reject the delivery of goods according to your online terms and conditions
- Have unified and consistent delivery procedures for all your retail stores
- Review the order content to ensure that it matches the customer online request, to avoid further chargebacks or unnecessary claims
At Payment-Universe we have +10 years of experience in protecting online businesses from the risk of fraud. If you need to optimize this area of your business, just contact us. Additionally, using our Payment Manager service you can benefit from our periodical risk management monitoring and optimization recommendations.