Know the Fraud Warning Signs


Have you ever been in your retail store and something feels off? Your ears perk up and a sixth sense seems to kick in. You look around and there’s a person lurking in the corner of your store, so you start to nonchalantly head their way. They see you heading in their direction and suddenly bolt from the store. Fortunately for you, your intuition saved your store from potential loss.

Now that you have an online store, how can your intuition save you from potential online risk?

fraud-risk-scoreFraudulent orders are the concern of every online retailer, particularly if you’re accepting international orders. As a service to our Modern Retail clients, we provide a Fraud Risk Score for every order received. A risk value is assessed on each order based upon set criteria so that retailers know when to follow up on suspicious orders.

If you don’t have a service like this, that’s okay. Below are some guidelines and suggestions to help lower your risk of fraudulent orders. Of course, there are no guarantees, but the more aggressive you are when reviewing orders, the less likely you are to be “had”.

Fraud Warning Signs

Just like in your store, your instincts can still save you from online fraud by looking at the data. Looking at the following information can raise red flags:

  • Different bill-to and ship-to addresses
  • Foreign credit card shipping locally
  • Shipping to a Post Office Box
  • Shipping to a Hotel
  • Large orders (either in number of products or price)
  • Products that don’t match (such as a size XL shirt with a Med jacket)
  • 2nd Day or Next Day Air shipments
  • No phone number or email address provided
  • Free email address used (Hotmail, AOL, Gmail)


google mapsMany clients will use Google Maps or Windows Live Search to verify the address and the type of address. For example, does your search return an empty lot for a give address? Or is it a home or apartment?

Phone Numbers

Always verify the phone number. You can use a reverse look-up site as well as verify that the area code matches the billing/ship to address. If any of these items don’t match up – be careful!

Call the shopper!

In addition to the steps above, don’t hesitate to call the shopper to verify the order. If the number is not bogus, listen to the shopper – do they seem defensive, rushed or uneasy when speaking with you? Even if they are verifying the information? If so, proceed with caution!

Blocked countries

While Modern Retail does not block any country from placing an order, you can choose not to ship to certain countries – particularly if you have had experience with fraudulent orders in the past.

Chargeback Registry

If you’re suspicious about an order, check the shopper out on the Chargeback File. This is a global registry with over 5,000,000 records of customers who have filed chargebacks with merchants. Depending on how many orders you review here, there can be a nominal charge to “join” this site.

In the end, whether you have a fraud risk assessment or not, review the warning signs and go with your gut. A little due diligence goes a long way.



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