Fraud on the rise?
2011 so far has been the year of fraud and theft for us. In the last five years we’ve had 1 maybe 2 fraudulent orders. This year so far we’ve had three. Just last week three customers called to tell us that even though UPS shows their package was delivered, they never received it. They think their items were stolen. I never knew there was a black market for wedding and baby shower favors!
We’ve been lucky in the past; we haven’t had to deal with these issues. Now that we have had so many in such a short period of time we had to come up with a plan to protect ourselves.
We now double check all orders. If the AVS or CVV don’t match we don’t process until we can confirm the information with our customer. Even if the customer placed the order over the phone, we still call them back if the information doesn’t match. This is probably obvious to most merchants. We typically did check this in the past, but some did get through.
We came up with a standard email that explains what we need, and we typically call the customer too. This means a lot more time on the phone or in our email. But that’s okay! If we can verify the information we know it is a real order and we can proceed. If they don’t return our calls or our emails after 24 hours the order is cancelled.
At first I worried that this would upset our customers. But so far only one customer was upset. She felt her billing address wasn’t any of our business (long story). The majority of our customers have been very grateful that we are taking the time to confirm that they are indeed the card holder.
Stolen packages are a different story. I’m not sure what to do to prevent this. Once our orders are given to UPS it is really out of our control. We do state in our policies that we suggest orders be shipped to an address where someone will be home, but I know not every customer reads our policies before placing an order. Right now we are learning as we go on this one. We don’t require signature on packages, this may be something we need to do if the theft continues. Our suppliers have been wonderful in helping us file a claim and even sending replacements at no charge, although they tell me they don’t always do this. If we have more stolen packages they won’t always send out the replacements.
What is your policy on this? I would really love some input from other Merchants on your policies on stolen packages and on preventing fraudulent orders.