S-Commerce Fraud Prevention

Growing a retail business means finding where your customers are at and meeting them on their own terms. Merchants had to learn the ways of ecommerce when the internet started taking off and make the leap to mcommerce years later when smartphones and other mobile devices became ubiquitous.

The new frontier is s-commerce: shopping over social media. These networks offer many opportunities for merchants, but proper precautions must be taken. Fraudsters will always follow the money, which means that s-commerce merchants will have to anticipate and prevent their schemes. How can merchants protect themselves and their customers from fraud in s-commerce?

A lot of digital marketing is premised on getting customers to visit your website. Once they’re on your turf, the thinking goes, you can wow them with compelling content and enticing experiences that convince them to make a purchase.

It works when it works, but many potential customers prefer to stay on their favorite social hangouts rather than load up unfamiliar websites.

Three quarters of consumers get frustrated when they can’t contact a merchant’s customer service on their platform of choice, and many merchants’ response to attitudes like this is to build increasingly robust and responsive social media presences.

Fraudsters, too, have found that social media is a great place for them to find their target audience of potential scam victims. Phishing, fake profiles, and bots are all too common on social platforms, and merchants have good cause to be concerned about the rising trend of s-commerce leading to new forms of social media-enabled fraud.

There are good reasons for merchants to make a bold push into marketing, selling, and communicating over social media right now, but before venturing into new territory it’s always essential to know what to look out for in terms of fraud.

What is S-Commerce?

As you've probably guessed, the "S" in s-commerce stands for social. S-commerce refers to the practice of using social media networks like Facebook, Twitter, Instagram, and LinkedIn to promote your brand, market your products, and communicate with your current and future customers.

Like mcommerce, s-commerce is more of a subset of ecommerce as opposed to an entirely separate thing. Like, shares, comments, and other forms of engagement are the key metrics of s-commerce.

Successful s-commerce campaigns don't just use social media as an advertising platform, they take advantage of the inherent qualities of the medium. They might make use of endorsement posts from celebrities and influencers, or launch employee advocacy campaigns to spark ongoing conversations. Contests, user submissions, polls, and other interactive content play a big role, too.

Another important aspect of s-commerce is recognizing users and personalizing content for them. When the users engaging with you are linked to their social media profiles, it's easy to identify them before serving up content, and the data in their profiles can also give you a wealth of information that can be used to create unique, customized experiences.

What is S-Commerce Fraud?

The ability to recognize, track, and call up personal information about users makes social media a wonderland of possibilities for marketers. Unfortunately, fraudsters can just as easily take advantage of the instant familiarity made possible by social media.

For the most part, social media scams just give fraudsters new ways to pull their same old tricks, mainly credit card fraud, merchant fraud, and account takeover. For merchants, these acts of fraud will manifest as transaction disputes and chargebacks, and it may not always be readily apparent when social media was used to facilitate it.

While many s-commerce features will allow consumers to start shopping and adding items to their cart within the social media platform itself, checkout still happens on the merchant's website.

To identify fraud and chargebacks that originate on social media, merchants may need to follow the transaction and customer data back to their earliest sources.

One of the more dangerous forms of s-commerce fraud is when fraudsters use phishing or brute force hacking to take over a victim's social media account, which may then be used to grant them login access to other websites the victim had linked to their social media account.

Phishing itself is quite prevalent on social media, with fraudsters able to create convincing fake accounts modeled after brands or individuals that the victim is already inclined to trust. The messaging features present in every social media platform provide these fraudsters with an easy way to make contact with their targets.

How Can Merchants Prevent S-Commerce Fraud?

Preventing s-commerce fraud can be difficult for merchants, because so much of the environment is not under their control. You can use two-factor authentication and strong passwords to protect your website, but you can't do much to stop social media users from giving away login credentials and personal information to clever scammers.

One little thing that can help is to do your part to educate customers about safe s-commerce shopping habits. For example, you can remind customers in your communications with them that you will never ask for things like their password or credit card number over a social media messaging app.

Friendly fraud is always a risk when you’re bringing in lots of new customers and trying out new marketing techniques.

If you see an increase in this type of chargeback, you need to analyze your chargeback data to determine whether or not your s-commerce activities are contributing to the problem.

Social media can sometimes work in a merchant's favor in cases of friendly fraud. If a customer claims that they never received a product they ordered, or that it arrived in unusable condition, but then posts photos to social media showing themselves using that very same product, you may be able to submit those photos as compelling evidence in chargeback representment.

Conclusion

It's exciting when technology makes it possible to find new marketing opportunities that can help you expand your customer base, but the harsh reality of dealing with new and unfamiliar forms of fraud can put a real damper on things. By learning what to expect and how to prepare for it, you can mitigate the impact fraud will have on your business.

Don't forget that s-commerce can also be used to increase the reach and accessibility of your customer service, which can help you resolve customer complaints that might otherwise lead to merchant error or friendly fraud chargebacks.

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