Fraudulent orders include orders placed with false details, orders paid for with a misused payment card, and systematically unclaimed cash-on-delivery shipments. For an e-shop they represent a direct loss – with an unclaimed shipment the retailer pays for shipping in both directions and the goods come back damaged or degraded, while a misused card carries the risk of a chargeback. The risk can be limited by several measures: verifying orders above a certain value by phone or email, restricting cash on delivery for first purchases or after repeated non-collections, monitoring unusual patterns such as multiple orders under different names at one address, and keeping a record of problem customers. However, the measures must not be discriminatory, and personal data protection rules apply when processing customer data. It is worth monitoring the share of unclaimed shipments separately by payment method and by channel.
See also: Payment gateway, Post-purchase communication, E-shop terms and conditions.
