Click & Collect Fraud
the shipping address. Fraudsters need some way to collect the goods they’re fraudulently purchasing, but using their own shipping address is risky.If they use a home or business address, they can be traced and identified once the fraud has been discovered.Inconsistencies between shipping and billing addresses are also analyzed as possible fraud indicators by anti-fraud software.
With click and collect fraud, the shipping address doesn’t matter, because the fraudster is going to pick the order up in person. As long as nobody checks their ID (and many retailers do not), they’re almost sure to get away with the goods. Even if the retailer’s anti-fraud tools flag non-local addresses as a red flag, fraudsters can usually get around it.
Most of them buy their stolen payment credentials in bulk on the dark web, and they can simply select cards with local billing addresses to use for click and collect fraud.
The other prevalent danger is that so-called friendly fraudsters will make click and collect purchases with their own cards, then dispute the charge with their bank with false claims that they never received their order. If the retailer doesn’t verify the identity of the person making the pickup, they won’t have much of a defense to mount against these fraudulent click and collect chargebacks.
Of course, sometimes these click and collect disputes are based in fact. Just as it’s easy for thieves to walk away with a package left at somebody’s doorstep, it’s easy enough for an opportunistic thief to grab a waiting order at the store counter and walk off with it. Because of this, it can be hard for merchants to tell the difference between legitimate click and collect chargebacks and fraudulent ones.
How Can Merchants Offer Click and Collect Safely?
While you don’t want to add too much friction to the click and collect process, a little bit of added security at the right points can reduce the likelihood of fraud and assure your customers that you’re looking out for them.
Without a doubt, checking ID at pickup is one of the best ways to ensure that the cardholder and the person picking up the order are the same individual—and if you scan IDs or obtain signatures, you’ll have evidence you can use to fight fraudulent click and collect chargebacks. An alternative approach would be to send a confirmation code to the purchaser’s device for them to present upon pickup.
You can also use your anti-fraud tools to protect you from click and collect fraud at the point of sale. Shipping addresses may be unreliable, but you can analyze lots of other information, such as device ID and behavioral data, to determine whether or not any given transaction appears to be fraudulent.
Conclusion
Consumers are increasingly desirous of convenient omnichannel shopping experiences, and the ability to choose immediate pickup instead of delivery is a big part of that. To manage the risks, merchants need to find a balance between seamlessness and security that satisfies their customers without compromising protection.
When it comes to illegitimate click and collect chargebacks, automated defenses alone won’t stop them. You have to be ready to fight back against these chargebacks with compelling evidence and show the friendly fraudsters that you’re no easy mark.
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