Package rerouting is one of the oldest tricks in the fraudster book. It generally begins with stolen credit card details, and continues with an online order that appears safe, complete with the stolen card’s billing details and a matching shipping address. What happens next is a headache many merchants are unfortunately familiar with: fraudsters reroute the package and have the goods delivered to their location (instead of to the cardholder’s home). For the merchant, the goods are unaccounted for, and a chargeback ensues shortly thereafter. Rerouting schemes have caught the attention of merchants and shoppers alike. The method of operation is quite straightforward, but its perpetrators have devised some sophisticated ways to keep merchants off guard.

Completely blocking the option to reroute packages may seem like an option, but could be a bad move in terms of customer experience, as there are many legitimate reasons customers would want to change the shipping address after placing the original order. Sometimes customers realize they will be at work when the package arrives, and others may prefer to have gifts shipped to an alternative address to maintain the element of surprise. So how can merchants protect against this type of fraud without increasing false declines or creating unnecessary friction? In this post I’ll share some tips on how to undermine fraudster efforts and to avoid incurring the associated losses.

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