“I would say Riskified changed our lives.”
Eileen Shulock, VP eCommerce at Kirna Zabête
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All posts with the tag Chargebacks

It’s the 2nd largest eCommerce market in Latin America, with nearly 60 million internet users. More than half of online shoppers frequent international websites, and online purchases are expected to hit $65 billion by 2020. So why are so many eCommerce merchants so cautious with Mexican orders, to the extent of blocking Mexican IPs altogether?

Mexico has a bad reputation when it comes to online fraud. In 2016, the Mexican chargeback rates was 4 times higher than the global average, so it’s hardly surprising that fear of fraud leads many eCommerce merchants to shut their virtual doors to Mexican consumers. In this post, I’ll demonstrate how businesses who block Mexican orders are making a costly mistake – turning away many good customers and a lot of revenue. I’ll also provide tips for managing fraud from this market.

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No merchant is immune to the risk of attack from sophisticated fraud rings. And even if you think your eCommerce store is handling that risk well, complacency is a dangerous choice. Threats from fraud rings often arise unexpectedly and the strategies and schemes they use are continuously evolving.  

On average, fraud costs merchants 8% of their annual revenue, and fraud rings account for much of the large-scale fraud that merchants encounter. In this post, I examine the dangers posed by fraud rings and provide actionable tips to help businesses detect and foil these attacks.

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Everyone has heard about it by now. Equifax, a provider of credit scores, was hacked between May and July of this year. PII (Personally Identifying Information) for about 140 million Americans was potentially compromised, as well as the details of over two-hundred thousand credit cards.

We’ve been hearing a lot of concerns from merchants that the Equifax breach could result in more fraud attacks and chargebacks for their eCommerce stores–and wondering if they need to be more cautious in approving orders now. But despite some recent scary headlines, we’d like to urge eCommerce retailers to stay calm. Overreacting to this breach is likely to cause more problems than it solves.

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Shoppers don’t arrive at your eCommerce store by chance. They either typed in your URL directly, arrived via search engine, or clicked a link on some other website. Merchants usually use this information to maximize the quantity and quality of their site visitors. But one aspect that tends to get overlooked is the rate at which channels are bringing fraudsters to your site.

With a better understanding of this traffic, merchants can concentrate marketing resources on channels with less fraud, and even improve their fraud detection accuracy.

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Managing eCommerce fraud operations is no easy task; whether hiring, training, and managing a manual review team, monitoring approval rates, and optimizing internal rules, a fraud manager’s attention is often drawn to many places at once. With so much on their plate at any given time, it’s easy to understand why merchants are drawn to “silver bullet” solutions to manage and prevent chargebacks.

One “solution” to chargebacks often utilized by merchants is fraud prevention blacklists. When hit with a chargeback, all the transaction details are simply added to a blacklist, so that the next time an order is placed from the same email or IP address, the transaction is automatically declined. While they may seem like a great way to streamline internal operations and to prevent future fraud, blacklists are in fact a misguided way to address chargebacks.

Blacklists block not only fraudsters but also many good customers. Moreover, there are basic methods fraudsters can use to “fool” your blacklists. In this post, I will explain why you should stop relying on blacklists for fraud prevention.

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One of the biggest challenges eCommerce retailers face is avoiding the rising number of chargebacks resulting from CNP fraud. In a 2016 study, online merchants reported that around half their fraud-related revenue loss was a direct consequence of chargebacks.

Many of these are the result of clear cut fraud – where stolen credit card information is used to make a purchase without the authorization of the cardholder.  But an increasing number of chargebacks are the result of ‘friendly fraud’, when an individual disputes a purchase, despite having authorized and received it.

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Global online retail sales are projected to exceed $2 trillion in 2017, and double to $4 trillion by 2020. Despite this rapid growth, selling online is not without its challenges, and eCommerce merchants are increasingly seeing their hard-earned revenue fall victim to CNP fraud and the associated chargebacks. A 2016 study confirmed this, with online merchants reporting that chargebacks accounted for much of their fraud-related revenue loss.

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For online fraudsters who spend all year hiding behind masks, Halloween is just business as usual. Fraudsters who obtain stolen credit card details and hide behind makeshift email accounts are especially fond of digital goods, because of their high resale value and instantaneous over-the-web delivery. These goods, mainly digital gift cards, airline and event tickets tend to attract the most sophisticated and devious fraudsters.

Over the course of several years, Riskified reviewed millions of orders, including many instances of obvious and subtle fraud. Below, we lay out some of the most common ‘‘tricks” we’ve identified which fraudsters use to swindle retailers. These includes tips on shady order elements to look for, as well as methods used by fraud rings that our in-house tools were able to identify, and which we think merchants should be aware of as they track and review orders.

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When it comes to protecting their revenue from fraud, airlines and online travel agencies (OTAs) find themselves in a catch-22. Strict rules and fraud filters reduce chargebacks, but given that clear-cut fraud only occurs in approximately 2% of card-not-present flight orders, these measures also inevitably lead to costly false declines and disgruntled [ex]customers.

In this post I discuss how airlines and OTAs can manage this conflict by using data from a range of sources to evaluate orders containing mismatches, rather than relying on discrete data points to identify and block ‘suspicious’ customers. By investigating online shopping behaviour through less formal fraud detection techniques, online sellers can leverage their data to get ahead of the game and boost online revenue.

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In the world of CNP fraud, every day is Halloween. Excluding exposed fraud, which is fairly uncommon, perpetrators of online fraud go to lengths to conceal their identity and location in an attempt to fool eCommerce merchants. In this post, we provide an overview of the various techniques and methods employed by fraudsters to disguise themselves and give some pointers on how to identify these tricks for what they are.

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Fake Names

The most basic of ‘disguises’ used by fraudsters to to avoid getting caught are fake names. To make a fraudulent transaction appear legitimate, fraudsters employ the following methods: 

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