5 Ways to Improve Your Shopify Fraud Prevention Tactics

Shopify is a powerful ecommerce solution with many benefits. It’s easy to use, scalable, and provides access to the Shopify App Store. You can find thousands of useful apps that help with everything from sales tracking and inventory management to shipping and marketing. Shopify also uses advanced fraud detection technology to safeguard your online store against fraudulent transactions, so you don’t have to worry about getting burned by dishonest customers or competitors who want to drain your resources without giving anything in return.

However, there are ways that even honest shoppers may try tricking your system into thinking they’ve made legitimate purchases when they really haven’t. These tactics can be compelling enough for them to get away with it and do so again after being caught. Integrating a solid anti-fraud tool and taking preventative steps will help ensure your online store stays protected as you grow.

1 – Start with Shopify’s Native Tools

Shopify created a built-in fraud detection and analysis tool a while ago to cover some of the concerns of many online store owners. This simple integration aims to address high-risk orders by identifying issues with billing and shipping addresses not matching up, recognizing IPs with known fraudulent charges, and flagging any stolen credit cards.

This service is 100% and offers a basic level of protection. However, you should monitor its success rate every once in a while because it can be overly sensitive and restrict orders from real people looking to make a purchase.

2 – Add a Second Layer of Anti-Fraud Protection

After you have integrated Shopify’s native fraud prevention tools, consider adding a second layer by using FraudStar – Fraud Protection from the experienced developers at OPMC. This powerful Shopify app uses AI minFraud systems from MaxMind to identify risks and analyze critical indicators of chargebacks, velocity attacks, and more.

You get way more control over the orders you receive, avoiding chargeback fees from your payment processor and filtering out risks based on a score for all transactions. The robust AI tool places a value on the transaction according to factors like:

• IP
• Zip Code/Geographic Area
• ISP
• Time Zone
• VPN Use
• History of Fraud
• And much more!

Chargebacks and velocity attacks can cost you thousands of dollars if they go left unchecked. Ensuring you can avoid this cash flow issue is necessary to protect your online store from fraud.

3 – Organize Automation & Clean Workflows

Anytime you can automate processes in the workflow of your Shopify site is good. You want to streamline operations so that when a problem does arise, it is because it is well outside the regular activity on your store and accounts.

The point is to free up the time for yourself, your team, and your staff. That way, you can redirect resources at customer engagement, marketing, social media, and developing future products or efficiencies to grow your potential revenue streams.

4 – Stay PCI Compliant

PCI-DSS compliance is a requirement for all online stores. If you’re not familiar with the acronym, it stands for Payment Card Industry Data Security Standard, and it’s one of the most important things any online business can do to stay secure. The PCI Council was founded in 2006 by American Express and Visa, MasterCard, and other major companies to create a set of guidelines for protecting credit card information during ecommerce transactions.

The point is to ensure every online transaction is conducted safely. If you fall out of compliance, you risk losing status with your payment processor or increasing your chance of fraud. This can end with financial penalties or sanctions against your Shopify account.

5 – Prepare for Peak Shopping Seasons

The holiday season is the busiest time of year for retailers, and fraudsters know this. They can use this rush of orders to their advantage by creating fake orders that have the potential to drain your inventory or credit lines. To prevent these losses, you should prepare yourself as early as possible.

A recent 2021 report showed a 25% increase in malicious ecommerce fraud compared to the rest of the year. This reflects the holiday season from roughly October to December. The point is when you know your online store is about to be inundated with numerous requests from potential fraudsters, you should double down on any systems in place and enforce restrictions, so you avoid unwanted expenditures.