While the holiday season can bring eCommerce retailers many things – boosted sales, increased site traffic and eager shoppers – it is also prime time for fraudsters to make their move. BlueSnap CEO Ralph Dangelmaier let PYMNTS in on the seven habits online merchants can take on to keep fraud at bay — not just during the holidays, but all year long.

The holidays may be winding down, but as online merchants approach the New Year it’s still just as important to keep a vigilant eye on the ever growing threat of fraud. Along with the U.S. market’s EMV migration just a few months ago, industry experts have continued to predict a significant increase in the fraud risk for eCommerce merchants, which will surely continue in the years ahead.

“As the use of stolen cards in-store becomes more difficult for fraudsters, they will turn to online shopping to complete their faux-purchases,” Dangelmaier explained.

Back in 2014, the National Retail Federation’s Return Fraud Survey found that 81.8 percent of retailers said they experienced losses from merchandise purchased with fraudulent or stolen payment methods, which was up from the 69 percent who said the same in 2013. Dangelmaier noted that the trend apparently continued in 2015, with a nearly 30 percent jump in the number of reported card-not-present fraud attempts thus far.

In order for online retailers to stay one step ahead of fraudsters, while also maintaining the ability to provide frictionless, mobile-friendly shopping experiences on their sites, Dangelmaier provided the following habits every eCommerce store owner should follow:

  1. Question Big Orders

If your average order value is $100 and a shopper drops $5,000, it’s too good to be true. You’re looking at chargeback fees at best and likely lost merchandise.

  1. Verify Suspicious Orders

If an order is odd, look for inconsistencies or, better yet, call the shopper and ask them to verify the information.

  1. Run The “Duck Test”

If it looks like a shopper, buys like a shopper, and self-identifies like a shopper, then it probably is a shopper. However, when a buyer does something that is out of habit, that’s your cue to investigate. If Acme Corp. orders $7,000 worth of electronics from a residential address, something is screwy. Most shoppers don’t try to use seven different credit cards before getting an order through. Most shoppers don’t use a billing address in Arizona and a shipping address in Germany. These behaviors are akin to shopping at the grocery store with a black ski mask on.

  1. Blacklist The Bad Eggs

Keep a blacklist of fraudulent credit cards, email addresses and shipping addresses so you decline them in the future. This should be done at a system level to ensure real-time automation to protect your business.

  1. Create Fraud Rules

Any business can create rules for fraud prevention. Rules are designed to flag suspicious orders without interfering with genuine purchases. If, for instance, 98 percent of your orders are less than $600, require a manual review of orders over $600. Track the percentages of legitimate and illegitimate transactions that trigger a rule to see if it works. Make sure there is a process to routinely review and tune the rules for your site.

  1. Study And Respond To Fraud Patterns

Monitor declined transactions so you know how fraudsters attack your site.

  1. Determine Which Products Fraudsters Purchase

Fraudsters usually buy products that they can resell or use your site for to build a “good card” pattern for their planned purchases. They also target lower cost items and spread them across multiple credit cards because repeat offenders know that fraud prevention systems flag expensive purchases.


Dangelmaier’s biggest piece of advice for eCommerce merchants facing the fraud fight is to trust their instincts. As sophisticated fraudsters move their activities online, it will take a sophisticated approach to take them down, and as Dangelmaier points out, legitimate customers will always appreciate merchants going to extra mile to ensure the financial interests of its shoppers are protected.

“Keep calm and invest in both a great consumer experience AND in fraud prevention,” Dangelmaier said.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.