Fraud Detection for Magento Stores Made Easy with NS8

Fraud is an ever-present threat across industries. eCommerce is among the most attractive spheres for fraudulent actions with possible multi-billion consequences.

The landscape of eCommerce fraud changes rapidly, making it difficult for companies to keep up with constantly growing dangers.

Feeling overwhelmed to meet customers’ expectations while quickly identifying fraud? 

Don’t worry! We’ve got your covered!

In this article, we’ve overviewed the main dangers of eCommerce fraud and provided a step-by-step guide on how to overcome these challenges with a single tool. You will learn how to guard your Magento store with a powerful, innovative solution that detects fraud in every instance.

The Problem of Fraud in the eCommerce Industry

eCommerce Fraud: Statistics and Dangers

Retail is a very lucrative industry for hackers and fraudsters. eCommerce business owners face the need to quickly identify fraud while ensuring that shopping experience is up to customers’ expectations. Even though the task is challenging, sellers should be able to serve buyers and ensure their safety. Recent statistics prove that, over the last years, the task has become a real struggle.

Overall fraud attempts have doubled year-over-year. Since 2017, such attempts tripled. The statistics by LexisNexis clearly demonstrate that fraud is evolving and the vast majority of solutions fail to prevent it.

The lack of visible security is an important factor in transaction abandonment. About 27% of customers don’t proceed with the transaction if they don’t see any proof that a company has taken precautions to prevent fraud.

eCommerce fraud impacts businesses both financially and by undermining their security. For every dollar stolen by order fraud, retailers lose up to another $3.13 trying to address the issue.

Prevention measures help not only ensure the safety of the online retail business but also to save money trying to circumvent the consequences of fraud. However, it is not easy to prevent it, as the following issues arise:

  • lack of transparency
  • too much overhead
  • lack of control
  • conversions disruption
  • lack of accuracy

Luckily, there are automated solutions that are designed specifically to address the problem.

Main Types of eCommerce Fraud

The most popular types of eCommerce fraud

The difficulty to prevent fraud is caused by its diversity. Once the companies have learned how to prevent one type of fraud, another, a more sophisticated threat appears. Up to date, a few types of eCommerce fraud are prevailing in the industry. Let’s take a look at each of them:

  • True Fraud

This is one of the most common types of fraud in the retail industry. True fraud involves identity theft, as it occurs when someone makes a purchase using stolen credit card credentials.

This type of fraud concerns merchants the most – almost 71% of all sellers. And their concern is justified, as, in 2018, over 450 million personal information records were compromised.

  • Friendly Fraud

Despite its name, there is nothing friendly about this type of fraud. Such types of fraudulent actions occur when customers intentionally buy products and then dispute the charge with their bank while keeping the products. As a result, they get free products or services.

  • Phishing

The use of low-security passwords often leads to phishing fraud when fraudsters gain access to someone’s online account where payment data is stored. Almost 66% of retailers report phishing as being one of the biggest issues in the eCommerce industry.

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  • Refund Fraud

This type of eCommerce fraud has come to the online world from brick and mortar stores. Such schemes involve the use of a stolen credit card and filing for money return on a different card or account.

  • Card Testing

This fraud type is one of the most rapidly growing. It also involved the use of a stolen credit card. At first, a small purchase is made at an online store. If it goes unnoticed, fraudsters proceed and can make either a few big or a number of small purchases until the balance limit. The result of such actions can be worth thousands of dollars if a chargeback is initiated.

All these types of frauds are threatening eCommerce sellers every day. Lack of protection can cause thousands of dollars in lost sales, chargeback penalties, lack of customer trust, and much more.

NS8: Fraud Detection and Prevention Solution

NS8: eCommerce fraud detection and protection

Fraud can easily become the main revenue killer in the eCommerce industry. To circumvent such a situation and protect your store and customers, you can use a powerful solution designed to fight fraud in retail – NS8.

NS8 is an industry-leading solution that protects online stores from ad and order fraud while helping companies monitor their performance. The combination of behavioral analytics, real-time user scoring, and global monitoring allows the system to identify bots, detect malicious activity, track and monitor the quality of ad traffic and much more.

NS8 aims to protect online stores from three types of dangers: order fraud, advertising fraud, and underperformance. These are putting your store and customers’ safety at risk every day.

Let’s investigate each protection system in greater detail.

  • Order Fraud

NS8 is constantly tracking all users before, during, and after they place an order with your store. The system uses its own risk score that shows the reliability of customers. When the score is low, the order is flagged as probably being fraudulent and sent for manual review.

In cases when the score is low enough to raise suspicion, the system uses customer verification via phone. If customers pass the verification check, store administrators can safely proceed with the order and process it.

When NS8 users tag someone as suspicious, the system stores the data and uses it to prevent fraud in your store. This way, the solution reduces the chances of chargebacks and costs for manual monitoring of suspicious orders.

NS8 - Suspicious orders screen

  • Advertising Fraud

According to NS8, this type of fraud can eat up 34% of all your advertising budget, especially the remarketing budget. Fraudulent traffic doesn’t bring any value to your company; it only provides false data regarding the effectiveness of your ad campaigns.

NS8 identifies sources that bring fraudulent traffic, thus allowing you to adjust campaigns and make focus on the ones that deliver the best results.

 NS8 - Ads campaign activity screen

  • Poor Performance

Performance plays a huge role in the ability of your website to convert customers successfully. Statistics say that 57% of all visitors abandon a website within three seconds after they encounter any performance issue.

NS8 - Performance and reputation monitors

The solution monitors technical performance, global performance as compared to other eCommerce websites, keeps an eye on the store’s encryption certificates, and watches out for spam and malware blacklisting of your store’s domain.

Such a complex approach that NS8 is offering allows businesses to stay protected from fraud while providing the best customer experience and smooth performance.

Integrate NS8 with Magento: Step-by-Step Guide

NS8 and Magento Integration

The solution offers integrations with a number of top eCommerce platforms, Magento included. One of the simplest ways to integrate NS8 with Magento 2 is by installing the NS8 extension.

NS8 displays all information in user-friendly formats. From the navigation bar, you can get to the main sections of the solution.

The ad protection menu shows the following information:

  • Campaign activity – detailed analysis of website traffic from ads.
  • Suspicious sessions – summary of all suspicious sessions identified on your website.
  • Sessions timeline – overview of all traffic that provides insight into how users interact with a website, which pages they visit, and how many products they buy.
  • Campaign IDs – a place where you can manually set up campaign identifiers.
  • Campaign references – helps to manage traffic overrides with the help of manual assignment of referrers for ad campaigns.

The order protection menu is the place where you can access the following insights:

  • Suspicious orders – provides information about all suspicious orders that you can manage
  • Order rules – menu where you can create highly customized rules for orders within your store. NS8 offers a fully automated process, so you don’t have to spend a lot of time setting everything up.
  • Verify chargeback – a place where you can quickly view and manage all chargeback requests.

The Performance menu grants access to the following application features:

  • Reputation monitors – allows you to turn on and off and view the assessment of your website’s reputation.
  • Station – a place where you can specify which monitoring stations should be used for website performance testing.

NS8 is a powerful solution for Magento stores that allows website owners to sleep tight at night, knowing that their businesses are protected from fraud.

Protect Your Magento Store Right Now

Summing up everything said above, fraud is one of the main challenges in the eCommerce industry. Paying attention to fraudulent attempts, ignoring the need for additional protection may cost your thousands of dollars and even penalties for repeated chargebacks.

Arm your store with NS8 right now!

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