We have seen unprecedented growth in e-commerce the past two years. It is time now that we view it less as a blip on the radar and more as the acceleration of an inevitable trend. The convenience and capabilities of shopping online always made it an appealing option. However, for many, the pandemic turned e-commerce into a primary option.
This growth is continuing, and security has some catching up to do. With such rapid change in the industry, fraudsters can take advantage of businesses that had to adapt faster than they would have liked. Brands can protect themselves by asking a few simple questions.
Identity: Who is visiting my website?
It is crucial that you know who is visiting your website and why they are attracted to it. Is it because they want to engage with your business, or do they see cracks in the foundation and are hoping to exploit those? Collecting the right kinds of information can help you segment your visitors and pinpoint which ones might have bad intentions.
To combat potential threats, use a DDOS (Distributed Denial of Service) or Botnet (Network Robot) tool to monitor your visitors and collect relevant data. Not only is this a great way to spot trends and identify what’s working for your online store, but it also could expose irregularities that point you to potential fraud.
Knowing who your true customers are should be the first step in preventing fraud. If you are blindly analyzing your entire audience, fraudsters are far more likely to go undetected. By leveraging tools to keep a close eye on the visitors you have identified as potential threats, you will make your fraud mitigation strategy more efficient, removing some of the manual work from the equation.
Actions and Intent: How are my e-commerce site visitors behaving, and what are their goals?
As I have touched on above, understanding how your valid customers behave can shed light on the suspicious users who are interacting differently with your site. Those data collection tools can provide a safety net and allow you to complete a deeper analysis of why certain behaviors are suspicious.
What exactly qualifies as suspicious behavior, though, and what kinds of data can expose it? A great first step is to examine the touchpoints that your valid customers use and find outliers that may point to malicious activity.
Think of your site as a maze that your visitors navigate. They should enter and exit at expected points and take a logical, forward-looking path as they see what your site has to offer. Each unique user will likely take a slightly different path from Point A to Point B, but the trendline should largely look the same.
Bad actors, on the other hand, will navigate the maze very differently. Rather than starting at the entrance, they might jump straight to the middle and frequently return to a certain checkpoint, even though logic would say it leads nowhere. This could be a sign that they’re looking to scrape pricing and content, or are using scripting to make fraudulent transactions as quickly as possible.
Incorporating machine learning into login and account pages can automatically flag this sort of activity and monitor changes to personal information, which could signal a user was hacked. This is especially useful when it comes to your checkout process, with valid customers giving a baseline for typical purchase amounts, frequency, and product mixes.
Success/Failure: When are my e-commerce visitors successful, and what are the pain points of my site?
Another step toward vigilance is keeping a robust record of where your e-commerce site is succeeding and where it may be falling short of expectations. Not only can this lead to insights on fraudulent behavior and potential vulnerabilities, but it can also point to potential friction points for the consumer.
Perhaps you are getting a high rate of consumers failing to submit accurate CVV security codes for their credit card orders, which frustrates shoppers and leaves you with higher false positives. This could be something that fraudsters notice and decide to target, but it could also push valid customers away from your site if it is not addressed properly. Good security is crucial for brands, but it must always be balanced with a shopper experience that is as friction-free as possible.
By maintaining a good reporting structure and monitoring the customer experience from landing page to checkout, you can maximize legitimate purchases and minimize fraudulent activity. The best and most secure sites are those that are willing to acknowledge and fix their weaknesses, something that can only be done through regular assessments.
Reconciliation: How are these trends changing over time and how can I stay ahead of the curve?
Identifying e-commerce fraud is not a one-size-fits-all practice. Fraud groups will look different and evolve over time, but vigilance can thwart them before they get the chance to take advantage of your site. If your security measures are ironclad, fraudsters will decide that it is not worth their time, money, and effort, and ultimately decide to target someone else.
The biggest mistake businesses can make is assuming they won’t be targeted, because neglecting important measures can invite problems. Staying on top of changing behaviors through constant observation and analysis is a must when it comes to securing your site. Having the right tools in place—and if appropriate, the right partners in place—can stop problems before they begin.
Ultimately, e-commerce offers endless opportunities for businesses of all sizes, but safety needs to be the top priority for any company selling online. If you don’t put the proper guardrails in place, you’re doing a disservice to yourself and your customers and leaving both parties in a vulnerable position.
