Sellers should keep in mind that you may face these e-commerce frauds in 2021

After the COVID-19 pandemic in 2020 , sellers and consumers are looking forward to the possibility of returning to normal in 2021. However , there are still some pitfalls in the cross-border e-commerce market that will greatly hinder the seller's cross-border e-commerce business if the seller cannot anticipate and solve them correctly in advance. Here are some pitfalls that sellers must avoid when expanding to the international market:

Account takeover fraud increased 282%

Account takeover fraud ( ATO) has been a problem before 2020. However, with the ongoing COVID-19 pandemic and the development of e-commerce, more and more sellers have entered the cross-border e-commerce market and created new accounts. As a result, many accounts have been stolen or used by fraudsters.

Tech Republic reports that ATO fraud increased 282 % from the second quarter of 2019 to the second quarter of 2020. The surge in ATO fraud is mainly due to criminals discovering some account "business opportunities" and hacking accounts to make purchases and steal reward points through organized fraud rings.

Account takeover fraud is extremely devastating for e-commerce sellers because these criminals bypass the online store’s fraud prevention software. As a result, sellers suffer two major losses: one is the goods ordered by the criminals, and the other is the loyal customers whose accounts are stolen.

Sellers need to be aware that in order to avoid fraud cases, it is important to pay attention to changes in customers. For example, if a shopper suddenly uses a new recipient name and card number to make a purchase , you need to be vigilant. If this order passes the review of the fraud prevention tool, it needs to be marked for manual review.

Electronics and jewelry sellers are more likely to be scammed

In the e-commerce market, fraud incidents are endless, and their scale and frequency vary with product types and business scale. In fact, mid-tier sellers are more likely to encounter fraud than small e-commerce sellers . Small e-commerce sellers have fewer orders and often check their orders repeatedly, so they are less likely to encounter fraud.

Notably, sellers in the electronics and jewelry categories were more susceptible to fraud, likely due to the higher value of these products.

In addition, friendly fraud has always been a problem, but it has increased. For example, a consumer who regrets spending too much on a pair of shoes but really likes them may ask the seller for a refund, claiming that the shoes were never delivered and that they can get the shoes without paying for them.

In fact, as long as consumers do not experience the consequences of such incidents , whether intentional or fraudulent , inertia will form . CreditCards.com reports that 50% of consumers who successfully file a chargeback will file another successful chargeback within a few months , so this fraud trend will continue in 2021.

Sellers need to be aware that following the brand's transaction guidelines can help quickly dismiss chargebacks. In addition, sellers' fraud prevention systems need to take into account customer purchase behavior and purchase history to avoid friendly fraudsters . In addition, refund insurance or fraud prevention services with money-back guarantees can also be purchased .

Customer expectations remain high

Although sellers have always faced challenges with fraud, implementing strict automated fraud control programs is no guarantee that sellers will not lose their business. This is mainly because fraud detection programs that automatically close orders increase the likelihood of false positives , even reduce order volume, and drive away loyal customers who spend well.

Data from a survey conducted before the COVID-19 pandemic swept the world showed that 90% of consumers said that security was a very important factor in deciding whether they would shop online , and many consumers said they would not forgive sellers for fraud screening errors.

42% of consumers said they would not try to complete a transaction again if a seller refused to refund their money, and 13.6% said they would not buy from that store again.

Additionally, 28% of respondents said they would likely post a negative review on social media about their experience if a seller refused to refund them .

That is to say, as consumers' dependence on e-commerce continues to increase, their expectations are getting higher and higher. According to a survey data from April to September 2020, American consumers' satisfaction with online retailers fell by 4.9%.

In 2021, sellers need to note that in addition to manually checking fraud detection programs and marking orders as potentially fraudulent to avoid failing to retain loyal customers with good spending, they also need to continuously improve and perfect fraud prevention tools and strategies to improve performance in the coming year.

Fraud

E-commerce

Seller