eGift card transactions pose greater risk for fraud than regular transactions for two main reasons:
- They’re instantaneous. Legitimate and fraudulent purchasers expect to be able to redeem the eGift card immediately.
- They’re more anonymous. A consumer is not expected to provide identity detail to a retailer when purchasing an eGift card.
During peak seasons, some merchants end up approving more risky transactions that will likely result in fraud or chargebacks simply because they do not have the time to look at the same proportion of transactions.
You can’t just cancel every eGift card order. So, what can you do? Start by implementing these three best practices to prevent eGift card fraud:
- Collect phone and email information on eGift card transactions for both the buyer (and recipient, if possible). Through identity verification services like Whitepages Pro, you can increase your confidence in an order by using phone-to-name, and email-to-name verification for both buyer and recipient.
- Set review thresholds on the number of cards purchased, the velocity of orders going to a specific shipping address or email, and for certain sizes of orders.
- Sporadically revise your review thresholds: savvy criminals are able to reverse engineer your rules to figure out what orders you review and when. They are looking for the laziest, easiest to understand fraud rules. If yours are dynamic and precise, they will move on to easier targets.
Ultimately, eGift cards are very lucrative and consumers expect them to be an option on your site. If you are wise about how you review and approve these transactions, your business can enjoy the advantages without falling prey to fraud.
The statements made in this blog are that of Whitepages, and not Accertify, Inc.