Fighting Fraud In Auto Parts Ecommerce

Fraudulent orders are expensive. Not only do you lose a part, but you also lose the cost of shipping the part. Oftentimes, the loss on a fraudulent order is so high that you need ten (10) good orders to compensate for the loss from one (1) fraudulent order!

Suffice it to say, fraud is expensive. Here are tips and tricks for fighting it.

Six Fraudulent Order Red Flags

Generally speaking, these are the six signs of fraud you need to watch for:

1. The customer has a different billing and shipping address.
2. The order is for a larger-than-average amount.
3. The order includes an unusual number of the same parts. For example, someone orders three tuners, when most people order one.
4. The order is for part(s) that are easy to resell. A set of wheels? Easy to resell. A replacement alternator? Not as likely.
5. The order was made with next-day or second-day shipping.
6. The billing or shipping address is a PO box.

Whenever an order comes in with any of these red flags, it needs to be reviewed carefully.

How To Review Potentially Fraudulent Orders

If you think you could have a fraudulent order on your hands, you should use a process similar to this one to verify it.

1. Search the order history. Fraudulent orders often share a shipping address with a previous bogus order. If you keep careful records, it’ll be easier to search those addresses when a flagged order comes up. 

2. Match up IP addresses. Make sure the IP is located in the same area as the billing address associated with the order. Fraudsters are often using bogus addresses.

3. Call the customer. Call the customer to verify the VIN, the billing address, and anything else vital to the order. Trust your instincts here. If it still seems off, ask the customer to email you a photo of their government-issued ID and a signature.

4. Call the bank. Call the bank that issued the card and ask them to call the customer. It doesn’t always work, but some banks will do it.

5. Delay shipping. If you’re suspicious but can’t prove it, send an email saying “Order flagged and processing has been delayed a couple of days.” Then, wait at least two full business days to see if the charge holds or is charged back. 

When In Doubt, Cancel

The math says that you should cancel an order if there’s a 10%+ chance it’s fraudulent. In those cases, try contacting the customer and asking them to re-submit the order with a matching billing and shipping address.