How is Ecommerce Fraud Detected?

How is Ecommerce Fraud Detected

How is Ecommerce Fraud Detected?

When it comes to ecommerce fraud detection, merchants are always looking for the best ways to protect their customers and themselves. Fraudulent activity can take many different forms, so it’s important to use a tool that can flags potential issues in real time.

In this blog post, we’ll discuss how ecommerce fraud is detected and what merchants can do to protect themselves.

Transaction Verification

There are many different ways to detect ecommerce fraud. Some of the most common transaction verification methods include:

Order verification

This involves verifying that the billing and shipping information provided by the customer matches up. This can be done using a third-party service like AVS or by manually checking the information yourself.

IP address checks

Checking the IP address of the customer can help to ensure that they are not using a proxy server or VPN to try and hide their identity.

Credit card checks

There are various checks that can be performed on credit cards to check for signs of fraud. For example, you can check for mismatched zip codes or unusual spending patterns.

Address verification

This involves verifying the customer’s shipping address using a service like AVS or by checking public records.

Phone number verification

This involves verifying the customer’s phone number using a service like caller ID or by calling the customer directly.

Email verification

This involves verifying the customer’s email address using a service like eNom or by sending them a confirmation email.

Order history checks

Checking the customer’s order history can help to identify any suspicious activity, such as multiple orders from different IP addresses or credit cards.

Fraud score

A fraud score is a numeric value that represents the risk level of a particular transaction. There are various different scoring systems available, and ecommerce businesses can use them to help make decisions about whether or not to accept a particular order.

3D Secure

3D Secure is a security protocol that adds an extra layer of protection for online credit card transactions. It requires the customer to enter a special code (usually sent to their mobile phone) before the transaction can be processed.

Velocity checks

Velocity checks help to identify situations where someone is trying to place multiple orders using the same credit card or billing information. This can be done by checking for things like rapid fire IP changes or multiple orders being placed within a short time frame.

Fraud Detection Software

eCommerce fraud comes in many forms, from fake accounts and abusive behavior to stolen credit card numbers and fraudulent activity. And while eCommerce platforms have long had some form of fraud detection in place, the rising tide of online shopping has made it even more essential to have a robust system in place.

Fraud detection software helps to simplify the process of detecting ecommerce fraud by using machine learning to identify patterns of behavior that may be indicative of fraud. By constantly monitoring for red flags, fraud detection software can help ecommerce businesses stay one step ahead of the bad actors and keep their customers safe. In addition, fraud detection software can also help ecommerce businesses save time and money by automating the process of identifying and flagging suspicious activity.

Fraud Detection Analysts

An ecommerce fraud analyst is responsible for identifying and investigating instances of fraud.

They will work with the ecommerce team to develop strategies for preventing and detecting fraud. In addition, they will also liaise with law enforcement if necessary.

Ecommerce fraud analysts have a deep knowledge of the various types of eCommerce fraud, as well as the latest prevention techniques.

There are many benefits to hiring an ecommerce fraud analyst. Perhaps the most obvious benefit is that it can help to reduce losses due to fraud. In addition, it can also help to improve customer satisfaction by ensuring that legitimate orders are not delayed or lost in the shuffle. Finally, hiring an ecommerce fraud analyst can also help protect your business’s reputation by demonstrating that you take fraud seriously and are taking steps to prevent it.


Although ecommerce fraud is a growing problem, it can be detected through a variety of measures.

By using manual transaction verification, fraud detection software, and human analysts, businesses can protect themselves from fraudulent activities. Implementing these measures will help to ensure the safety of your business and customers.