Dydacomp Helps Small Business Combat Growing Threat of Fraudulent Transactions
December 15, 2011 (Parsippany, NJ)– Dydacomp, a leading provider of business technology platforms for small and mid-sized eCommerce and multichannel merchants, today announced best practices retailers can implement to more closely monitor their inventory and safeguard their revenue from the expanding threat of fraudulent online orders. According to the 2011 CyberSource Online Fraud Report, more than one percent of all online transactions are potentially fraudulent orders which could equate to a significant impact on revenue and inventory.
Like a major data breach, fraudulent orders not only impact the bottom line but can also severely damage a retailer’s brand. Fraudulent orders deplete inventory and force merchants to be hyper vigilant with their ordering processes – resulting in less product available and a hassle for customers. Additionally, most card-issuing banks will side with the consumer, whose card data was used in the transaction, and refund them. But the merchant will not receive compensation for loss of inventory or revenue.
“Out of the $4 billion that our clients process on an annual basis, an estimated $48 million is at risk to fraudulent orders. In addition to this lost revenue and inventory, merchants suffer brand damage, which can be more costly in the long run. This is why we’ve focused on fraud protection in our latest version of Multichannel Order Manager,” said Fred Lizza, CEO of Dydacomp. “As smaller-sized businesses are increasingly becoming the target of fraudsters, there are steps that they can implement to detect fraud and protect their business.”
According to the CyberSource report, large online merchants protect their businesses daily from fraud by using up to eight automated and manual tools to detect and prevent fraud. But small businesses lack the resources in capital and human resources to implement those same mechanisms. The following best practices can help minimize vulnerabilities and reduce fraudulent orders:
- Activate fraud prevention tools in the payment process and back office systems and create processes to review those orders that contain certain indicators of fraudulent activity.
- Require card identification (CID) information – the extra three or four digits used for security on all credit cards – and address verification on all orders paid by credit card. Doing so typically ensures the buyer actually has the card in his hand and is shipping to the address associated with the card holder. Where it’s a separate ship to/gift to address, collect bill to address to verify authenticity.
- Review past orders that have been fraudulent to identify the themes that are specific to your business.
Small businesses should also look closely at orders that contain any of the following to prevent fraud:
- As electronics are the number-one products associated with fraud, review all electronic category orders.
- Review orders shipping internationally.
- Search for orders without a CID number or a CID that doesn’t match the credit card number.
- Orders that are significantly larger than the average order size.
- First time buyers.
- Overnight requests.
Dydacomp provides essential order, inventory and customer management solutions to growing multichannel retailers that integrate easily with eCommerce platforms to drive efficiency, productivity, insight and growth. Dydacomp’s proven on premise & cloud-based solutions enable small to medium sized retail & fulfillment businesses to grow faster by expanding their eCommerce presence & automating back office operations to manage critical aspects of their business: multichannel order management; inventory visibility & control across multiple channels; drop ship management; rapid, reliable order fulfillment; customer management; integration with Magento, eBay & more.
Freestyle Commerce is Dydacomp’s latest cloud-based innovation. Freestyle is tightly integrated with third-party eCommerce software Magento, providing users with the smartest order management dashboards for the always up-to-date business insight they need to grow sales.
Over 2,000 multichannel merchants rely on Dydacomp's Freestyle Commerce and Multichannel Order Manager (M.O.M.) solutions to automate their back office operations and drive business growth. Dydacomp's clients engage over a million shoppers daily, generating nearly 10 million in gross merchandise sales every day. For more information, visit www.dydacomp.com and follow us on Twitter @dydacomp.
CMO & EVP, Sales