What is E-commerce Fraud | chargebackhit.com

E-commerce Fraud


eCommerce fraud refers to the deceptive and illegal activities conducted over the internet in the form of false or unauthorized commercial transactions. Fraudsters typically impersonate genuine users to make purchases without proper authorization. Various tactics are employed, often involving stolen customer data, where criminals use stolen credit cards or unauthorized access to customer accounts with stored payment information.

Over the past decade, fraud has increasingly shifted online due to the anonymity and reduced risk of detection provided by the internet. The absence of physical cards and signatures makes verification challenging, particularly in card-not-present environments. Consequently, merchants face a higher risk of chargebacks.

Chargebacks occur when cardholders discover unauthorized charges and file disputes with their issuing banks. As a merchant, this can result in lost revenue from the sale, the value of goods shipped, chargeback fees, and increased overhead costs. Moreover, chargebacks can harm your business’s reputation and lead to long-term struggles.

While consumers are the primary targets of payment fraud schemes, merchants also bear the brunt of these eCommerce fraud attacks. To protect your business, it’s essential to be aware of common eCommerce fraud tactics and threat sources, including account takeover fraud, synthetic fraud, clean fraud, overpayment fraud, new account fraud, gift card fraud, fraud as a service (FaaS), affiliate fraud, replacement/return fraud, and triangulation fraud. Vigilance and robust security measures are crucial to safeguard against such threats in the ever-evolving landscape of eCommerce.