IMPORTANT STEPS

FOR DETECTING FRAUDULENT ORDERS

AND WHAT TO DO ABOUT IT

 

 

 

 

 

 

What is Fraud?

A credit card transaction that is not authorized by the card owner is fraudulent. Unfortunately, fraud is a common consequence of ecommerce, and became more prevalent with the global pandemic.

A fraudulent transaction can result not only in lost product (if a fraudulent order is filled), but in costly chargebacks (if you don’t refund the fraudulent charge).

 

Fraud Detection Practices

Fraud detection practices should become a systematic part of your order management process and will become second nature to you once you become accustomed to the patterns.

For your best defense, review orders the same day they were received.  If your store uses a BluePay/CloverConnect merchant account, doing so will allow you to void the transaction before it is settled, enabling you to not pay processing fees on it. Regardless of your store's merchant processor, fraud perpetrators will know you are serious about fraud detection if you refund fraudulent transactions immediately.

Implementing these simple checks and the steps outlined in this document can absolutely mitigate the negative effects of fraud and actually deter fraudulent activity on your store.

 

The Steps

 

For every order attempt on your store, DermPRO and your merchant provider work together perform the initial checks for you, having implemented many levels of fraud checking before an order can be successfully placed.  Next, once an order is placed, DermPRO reports a riskScore to help you ascertain which orders merit further review, and alerts you to orders with riskScores that are beyond a certain threshold. See our document, How to Handle On Hold Orders, for more information about riskScore calculations and how to handle On Hold orders. Regardless of the riskScore, though, it is important that you decide if an order is valid or is fraudulent before fulfilling it.

 

If you know the purchaser as an existing patient, you can breathe easy. But if not, this Fraud Checklist will help you determine the validity of the purchaser.

 

 

 

 

Note that individually, the signs discussed below aren’t necessarily fraud indicators. However, the presence of more than one of these conditions often indicates fraud.

 

1. Purchaser Name and Shipping Recipient Name are different names.

 

2. The Shipping and Billing Addresses are not the same. Especially notice if one or both addresses are in states that are different from the state where your practice is located.

 

3. The Shipping Recipient Name is odd-looking with many uppercase letters. These are some known names used in fraudulent orders: MXEX Zhangjianan, John LXEF, Charles QLCS.

 

4. Multiples—Look out for an order for multiple quantities of one product, or several orders in a row for the same product.

• Oftentimes fraudulent purchases involve more than one quantity of an item, or many orders placed in succession for the same product.

 

5. An order originates from out-of-state

• Unless this customer is in your patient database or an otherwise known person to you, we suggest calling the customer and confirming their order before you fulfill out-of-state orders.

 

6. An online order has been preceded by one or more failed order attempts.

• Depending on the merchant processor your store uses, you may need to log into your merchant account to see failed or declined transactions. This would be a good thing to check if you are not sure whether the order is fraudulent or valid.
• If your store uses a BluePay/CloverConnect merchant processor, you can sign up to receive email notifications for each transaction attempt. Submit a request through our support ticketing system if you need to add recipients.
• When you see multiple failed transactions followed by a successful one, it may be that someone is testing stolen card numbers.

 

7. In some cases, the perpetrator may purchase a gift card and then use that gift card to make a purchase later that day or the next day.

• Notice if a gift card is purchased on one email address (especially when the card was not gifted to someone else) and redemption of that gift card is on a different email address.

 

 

What To Do If An Order Is Suspicious

When in doubt, call the purchaser.

We strongly advise that your staff call the billing phone number to confirm any orders you’re suspicious about.

 

Typically, on fraudulent orders the phone number is fictitious, and you won’t be able to get through to someone. If someone answers the phone, ask some simple questions about their order and see how they respond. Do they know the addresses, phone number, email, and name they used?

 

I’ve determined the order to be Fraudulent. Now what?

 

 

Steps for Handling An Order Believed to be Fraudulent

 

If you have followed the above precautions and believe that an order is likely fraudulent, you should do the following IMPORTANT Steps:

 

1. 1. Do not fulfill the shipment
   2. Refund the order in Shop Manager > Orders

 

 

Why do I need to process a refund?

 

Don’t skip this step! If you simply ignore a suspected fraudulent order and do not refund the transaction, it will most likely be charged back to your account. Chargebacks will cost you fees, and a high number of chargebacks may cause your merchant provider to close your account. Taking the precautions outlined in this document will help you avoid that situation.

 

A note about the One-Step Refund Process

If you've been a DermPRO customer since 2022 or earlier, you have been refunding in a two-step process via the Store Back-End. In 2023, we now support other merchant processors, and we have implemented a one-step refund process via Shop Manager, eliminating the need for you to log into your merchant account to refund credit cards. Simply open the Order in Shop Manager and click the Refund button. For more information about processing refunds, visit Processing a Full Refund in Shop Manager or Processing a Partial Refund in Shop Manager.