How to Check Customer Information to Prevent eCommerce Fraud

As a business owner, some of the most significant issues you’re bound to face are fraudulent orders, chargebacks, and fake customer information. It is unfortunate, but inevitable. As such, the best you can do is to be prepared to prevent it from happening.

Even as eCommerce experts, we also know how it feels to be on the losing end; trust us, it is not a good feeling. That is why we prepared this guide to show you a straightforward process for how to check customer information to prevent eCommerce fraud.

Here, you’ll get the practical steps for your execution, as well as the tools that put you ahead of fraudulent individuals. We’ll also point out some red flags that you must never ignore. Keep reading and see for yourself.

Why Verifying Customer Information Matters for eCommerce Stores

Simply put, verifying customer information is vital to prevent fraud. Doing so helps you detect stolen cards, fake details, and reshipping scams, no matter how well-packaged they seem. 

This is very important because if fraudulent activities go under your nose, your business bears the brunt of lost products, payment chargebacks, payment gateway issues, and, in the end, a damaged reputation. So, you’ll agree with us that a lot is at stake, and you can’t afford to sit on your hands.

Unfortunately, it is already the reality of many businesses as they face: 

• Lost revenue
• Higher chargeback ratios
• Payment processor risk
• Extra support workload

We don’t want this for you, so pay attention.

The Key Customer Details You Should Always Verify

These are the details that you must verify for every customer:

1. Name and Basic Identity 

Identity verification is fundamental because if a customer puts in a fake name, you can’t even pin the scam on anyone to start with. If you can’t get something as basic as their real name, you’re even vulnerable to consecutive attacks from the same individuals.

While there is no “exact” way to tell if a name is fake, it is still easy to spot that they are not very smart about it. All you have to do is remember these three things to verify customer identity online:

• Random
• Inconsistent
• Suspicious

2. Shipping and Billing Address

Think about it: why would someone genuinely be inconsistent about their address? The only solid explanation is that they are trying to derail any possible “investigations.” It basically makes them untraceable because you can’t even pinpoint where the attempt is coming from.

What you can do is integrate an Address Verification System (AVS) to verify card ownership. Basically, it checks the customer’s billing address against the records or database. That is quite difficult to bypass.

You can also employ maps and postal tools to confirm that the address really exists. With these, they can’t even get past registration if it is invalid.

3. Email Address

For email addresses, you want to check for:

• Disposable domains
• Strange formats
• No history on record

Thankfully, there are basic verification tools and plugins like DeBounce, Clearout, TurboSMTP, and many others that block fake emails at sign-up or on contact forms. 

4. Phone Number

Phone verification is simple, yet powerful. You can choose to send an OTP via SMS or call the number; either way is effective. To save you the stress of doing it manually, you can use a phone lookup or phone validation tool.

5. IP Address and Location

Every device connected to the internet has an IP address, so you can trace the request to its most likely source. It may not be very exact, but you get something very close enough for IP address fraud checks.

If you see the IP address is in one country and the shipping is to another, that should raise a concern. It shows the possibility of the person using a proxy or VPN to hide their tracks.

Practical Ways to Check Customer Information

Now that you know what to check, how do you go about it? Let’s show you practical ecommerce fraud prevention tips with a step-by-step way to go about it:

1. Review the order details at a glance: Have a quick look at the value, items, and shipping speed. Doesn’t have to be detailed; just a glance if anything seems off.
2. Check the address with map and postal tools: Map tools are handy for quick checks and lookups. If the address is invalid, they are up to no good.
3. Verify the email: Use an email validation service or plugin to easily determine whether an email is legit.
4. Confirm the phone number: SMS verification is faster; however, you can also do a quick lookup. Either way, the person must be able to confirm that they own the number.
5. Compare IP location with shipping address: Inconsistencies between the two are suspicious and could indicate they are using a VPN to place the order. In short, there’s a high chance they are trying to hide something.
6. Search the customer name and city: Thankfully, there are public information tools that allow you to search billions of records. With it, you can cross-check a customer’s name and address.
7. Check order history: If they are a returning customer, looking at their history will say a lot. Check for inconsistencies like canceled or failed orders, and you’ll find out a thing or two.
8. Flag high-risk orders for manual review: In any case where an order appears to be high risk, flag it for manual review. A little bit of time with an order is surely better than losing money.

To some, this may look like a long and “unnecessary” process; however, when you get used to it, it’ll only take a few minutes. A few minutes to save hundreds of dollars from fraudulent orders is worth it if you ask us.

Tools and Plugins That Help WooCommerce Stores Fight Fraud

With WooCommerce, you can delegate some of these processes to tools and plugins. Setting up your account will go a long way in fending off scammers. Here are some of the most useful tools for WooCommerce fraud checks:

Built-In WooCommerce & Payment Gateway Checks

Established payment gateways like Stripe, PayPal, Gpay, Apple Pay, and the like have some risk signals. When they detect suspicious transactions, they alert you. However, most business owners don’t follow up enough.

The right step to take is to hold the transaction and conduct a manual review. From there, you can decide whether to proceed with or cancel the transaction.

Fraud Detection Plugins and Services

Fraud detection plugins are often underestimated, yet they are legitimate tools that help identify high-risk activity. What they do is to access customers’ risk scores using some rule-based filters. Some of them also conduct velocity checks, which help them determine whether a visit is legitimate.

Basically, fraud detection tools like FraudLabs, YITH, or even the official WooCommerce anti-fraud are simple tools, and they do the job of:

• Blocking high-risk countries
• Limiting max orders per IP
• Flagging mismatched address data

With a good tool, you reduce the time of having to conduct a manual review of suspicious orders; only a few of them go through.

Public Lookup Tools and People Search Services

When used ethically, public lookup tools are potent. With them, you can confirm if a person exists, and even take it a step further by verifying that the basic details also match the name. So, when something feels off, tools like true people search will come in handy to cross–check a name, city, or phone. Emphasis on “when something feels off.”

In other words, it shouldn’t be your sole “proof” of someone’s fraud. Rather, tools like this are best for confirmation of a prior suspicion.

Common Red Flags of Suspicious Orders

With experience, we realized that all suspicious orders have several things in common. Let’s show you some of them:

• Huge first-time orders from a new customer.
• Billing and shipping addresses mismatch with different countries.
• A recurring history of failed payments.
• Customer refuses to provide additional verification when asked.
• The IP address location is far and different from the shipping address.
• Express shipping to a high-risk country or freight forwarder.

We are not asking you to cancel any order that ticks these boxes. Rather, it should prompt you to manually review it or possibly contact the customer to verify the authenticity. If it doesn’t yield anything good, then you’re within your rights to cancel the order.

How to Handle Suspicious Orders Without Losing Good Customers

As much as you want to cut out scammers, there should be a balance to it. You want to do it smartly, in such a way that doesn’t ruin the user experience for customers. 

We have to emphasize this because no matter how meticulous you are, you’ll still get false positives and negatives. By this, we imply that some “suspicious-looking” customers will actually turn out to be legit. But your approach to it will determine if they’ll find it offensive or not. With respect to that, here’s how to go about it:

• Check in with the customer with a polite email or call for phone and email verification for orders.
• Raise the option of them using a different payment method if the card looks risky.
• Request for a simple proof (bank statement with matching address) for high-value orders.
• Make sure to explain in your store policy the purpose of fraud checks, which is to protect your store and honest buyers.

Conclusion

We promised, and we delivered. Now, you have the most practical ways to check customer information to prevent eCommerce fraud.  As a business owner, applying our methods will help you to drastically reduce chargebacks in online stores, cut down on lost stock, and reduce the stress from fraud.

By now, you understand that you don’t need anything out of the ordinary to reduce risk. Just combine WooCommerce tools, public lookups, and manual review, and you will surely protect your store in the long term.

Frequently Asked Questions (FAQs)

Here are some of the top questions we get concerning this subject matter.