Fraud is unfortunately a lingering risk for all actors in the online space, the eCommerce sector is sadly no exception.
Even though banks, payment / card companies and commerce operators are becoming more skilled by the day applying increasingly sophisticated alert-systems there is still a lot of work remaining.
The risks eTailers need to be aware of are ever-changing in their characteristics but not too often in their nature. In our experience the most common issue relates to (credit) card purchases and the fraud related to this portion of the online funnel.
Already in a study from 2002, in the early ages of online shopping, conducted at the University of Gothenburg, the authors conclude that card fraud is a costly operational risk for the retailers. Already then, better (higher technostructure), and more reliable solutions were suggested.
One scenario, according to the Swedish Police, the retailer needs to be aware of / implement "red flagging" systems for, is when identical orders appear in a short period of time as the fraudster often "attacks" one site intensely, before moving on to the next "target". A seemingly simple scenario to track.
Another example that we at Instantor have seen are situations where purchases are made with card and goods are thereafter returned to the e-store for a "cash back" but where the fraudster want the money to be transferred to another receiver (either card or account) than originally used. The sector standard of only returning money to the card utilised at purchase reduces flexibility for the client, we believe. A simple measure of linking identity and account number could be a way of increasing barriers for fraud.