Protecting Your E Commerce Site Against Buyer Fraud - Blogmasters/Services GitHub Wiki

"How do you protect your business against shipping fraud?" I get this question about twice a week. The protection is always the same regardless of how the buyer pays for the item.

First, let us look at the way the buyer commits the fraud.

The buyer looks for tangible goods that they would like to have. A buyer purchases an item from an online merchant. The payment is through credit card or an online payment processor like PayPal. The buyer makes sure that shipment is via regular mail with no insurance. After waiting four weeks, the buyer contacts their payment processor and claims non-receipt of the item. The seller cannot supply proof of shipment so the buyer receives their funds back.

The fraud takes place when the buyer actually gets the item but claims non-receipt, thus either getting the product free or two of the same product. Overall, it is just not honest.

So, how does an E-Commerce site protect itself against this type of fraud? Easily, insure the shipping so that the buyer has to sign for receiving it.

How does this stop the fraud? It is proof that the buyer received the item.

Generally, shipping fraud is running ramped on eBay. Buyers are requesting items and not insuring them. The seller ships the item and then hit with the problem square in the face. On little items, insurance seems to be not worth it. Really, why insure items that are only $2.00? It could be the difference between making a good profit to not making any. If need be, register the item so you have some proof of the buyer receiving it.

Proof of the buyer receiving the item is the only way you can protect yourself against shipping fraud.

Onsist