Skip to Content

How fast shipping can flag you as a fraudster

Online shopping is a regular part of our lives these days. Millions of people purchase everything from shampoo to a new living room set without ever leaving the comfort of their own home.

Sites like Amazon and have revolutionized the way we shop. So much so that many of us have regular routines while shopping online. But could those routines potentially end up getting you in trouble?

For example, do you select the fast-shipping option each time you check out? How often do you read the E-retailer’s return policy?

If you overlook these things, you might be flagged as a fraudster. Soon, you may find that your transactions are frozen. Retailers are losing money both in the physical space and the digital space.

Return too much?

Inside brick-and-mortar stores, chip technology makes it difficult for retailers to track purchases. So, when a customer asks for a refund, the money is compensated by the store.

If a customer is a frequent “returner,” the store will usually catch on and flag that customer. In the digital space, orders that exceed a certain value or are selected for fast shipping tip-off fraud analysts that something might not be right.

Retailers beef up cybersecurity efforts

When you shop online, who could potentially decline your transaction? A number of retailers like Best Buy, J.C. Penny’s, CVS, and Home Depot work with third-party companies like Retail Equation, Riskified, or Signifyd to stop fraudsters from exploiting the online shopping experience.

Shoppers who habitually return merchandise will notice they now have a risk-score added to their profile. (BonusClick here to learn more about the secret database that tracks all of your returns.)

This score is made up of behaviors such as frequency of returns, whether the merchandise has a high likelihood of being stolen, much like cosmetics. And, if a customer returns a high number of purchases in a short time frame.

When you buy merchandise online, transaction data is sent to fraud detection companies who determine if the behavior is risky and crooked. The firms use scoring methods that are in line with how a cybercriminal would act if they swiped credit card information.

Algorithm’s identify fraud

Fraud detection companies use machine learning techniques and data-mining to prune faulty transactions. Data mining is a process that extracts raw data and turns it into information that gives an insight into consumer shopping habits. Once the data is collected, the data points are used to define the user.

This data includes browser fingerprinting, geolocation, and other behavioral analytics that are imported from the eCommerce site into the company’s fraud detection algorithm. Aside from the learning algorithm, these third-party companies compare your typical online shopping habits to see if anything looks out of the ordinary. If it does, the company flags the transaction as suspicious.

Riskified and Signifyed prevent, among other things, account takeover. Account takeover is when cybercriminals use your account information to make purchases under your name. They can do this through phishing emails, scams, viruses, or by obtaining your credit card, banking, and account information.

It doesn’t help that most consumers use the similar login credentials for each account. Risky anyone? These companies collect information each time you log in to your account, they know when you make changes to it like updating your username or password and when you use your credit cards’ loyalty points.

These transactions are often declined

So, you might wonder which transactions look the most suspicious? These repeat patterns immediately flag fraud analysts. For one, if your order has a mismatched billing and shipping address. Or, one billing address but multiple shipping locations.

For example, you might send a gift to your boyfriend and your mother who each have a different address. Fraud analysts only see that you are sending items to many different addresses, which is what fraudsters do!

A foreign IP address and foreign credit cards are also red flags. Much like if a customer in Slovakia purchased a handbag from a U.S.-based merchant.

It’s easy for crooks to use stolen credit cards to buy online and online retailers are usually left holding the bag when a customer reports a fraudulent charge. But retailers are fighting back and using new digital tools to catch a thief.

Wondering how-to brush up on your computer security? Use these 5 easy tips!

Keeping cybercriminals out of or gadgets is difficult. That’s why you need to take every precaution. Click here to learn 5 easy tips for better computer security.

Komando Community background

Join the Komando Community

Get even more know-how in the Komando Community! Here, you can enjoy The Kim Komando Show on your schedule, read Kim's eBooks for free, ask your tech questions in the Forum — and so much more.

Try it for 30 days