Jan 19, 2024
Mitigating Fraud: The Risk of Rentals
Fillip Gladkov
Fillip Gladkov
As the world of “re-commerce” continues to grow, so does the threat of rental fraud. At Sharpei, we understand the importance of securing online transactions, for businesses and customers alike. You might be wondering, how do we do it? How do I prevent fraud for my online shop? In this article, we will talk about the most common types of fraud that affect e-commerce businesses, Sharpei’s unique anti-fraud algorithm, and some strategies for you to use this year.
Regardless of your background, discussing this topic is of utmost importance. According to our partner, Shopify, approximately $41 billion in e-commerce losses were reported in the US in 2022 due to online payment fraud, more than double the losses of 2021 (Shopify, 2022). Let’s take a step back though, and let’s understand the different types of fraud that contribute to this metric.
Types of E-commerce Fraud
In the landscape of e-commerce, businesses face a myriad of challenges (trust us, we know), but particularly in areas pertaining to fraudulent activities. This section will go into three significant facets – Refunds, Rentals, and Online Payments – each presenting distinctive challenges and financial consequences for merchants. From refund abuse to the pervasive threat of online payment fraud, businesses have to navigate a complex environment to safeguard their operations and financial well-being. Let's explore how these challenges unfold and how your business could be affected by their impact.
💸 Refunds: Refund abuse represents a form of e-commerce fraud in which customers return tems to a retailer, claiming they are broken, damaged, or stolen, with the intention of receiving a refund. Despite the strict return policies imposed by many merchants to define refund eligibility criteria, this remains a financially burdensome issue. According to the National Retail Federation, retailers face a loss of $10.40 for every $100 worth of returned merchandise due to this specific type of fraud. Notably, refund abuse saw the most substantial increase in online fraud incidents, with merchants reporting a significant 56% rise in such cases in 2022.
💰 Rentals: Similar to the former type of fraud, rentals can also be broken, damaged, or stolen.
One common tactic involves renters falsely claiming that the rented item was already damaged or defective when they received it. By asserting pre-existing issues, these individuals seek toavoid responsibility for any actual damage they cause during the rental period. In more severe cases, individuals might rent items with no intention of returning them, essentially stealing the product. This poses a significant challenge for businesses, as they not only lose the item itself but also potential revenue from future rentals.
💻 Online Payments: Instances of online payment fraud occur when fraudsters obtain someone else's payment information and utilize it to make unauthorized purchases on your e-commerce platform. This form of illegal action, commonly referred to as credit card fraud, may come about in scenarios where scammers replicate your website, leading unsuspecting customers to make purchases on a fraudulent site. Global retailers are grappling with the repercussions of online payment fraud, and the prevalence of this issue is notably high. In fact, merchants in Canada reported a significant 71% surge in online payment fraud cases last year (2021).
From dealing with refund abuse to tackling the constant challenge of online payment fraud, businesses operate in a tricky environment where they must protect their operations and finances. Now, shifting gears to how we help, our anti-fraud and risk algorithm is like a superhero guard.
Sharpei’s Anti-Fraud Algorithm
Our CTO and Co-Founder, Lucia Clifford, does a deep dive into Sharpei’s security measures and our goal to have the best anti-fraud algorithm ⬆️
Our anti-fraud and risk algorithm has been tested with hundreds of clients over several years.
Today, the reliability is around 90%. We analyze 3000+ data points for each individual, including demographic factors, Biometric analysis and credit score checks. We also have a risk database with shared information from all of our clients, if someone commits fraud in one of them, we won't let them rent anything from your store.
On top of that, Each time a client rents something in your website using Sharpei, they will have to accept both yours and Sharpei's "Terms and Conditions". Therefore, you can set your own terms and conditions for your rental service. You can do this by uploading a pdf document from the admin panel in the “Legal” section.
Now, if you aren’t a Sharpei customer (which you can be!), your business will need to take specific actions to ensure that it is fraud-free. So let’s turn our focus to some strategies designed to strengthen your security and shield your business against the intricate web of scams that exist.
Strategies For Your Business
As we recognize the evolving tactics used by fraudsters, it becomes imperative for enterprises to adopt a strategic approach to security. The following strategies are the most important to ensure safety for your business, as well as trust and security for your customers. Without further ado, here are the takeaways:
✍️ Manually Review Orders: (included in Sharpei!)
Implement a manual review process for orders flagged as high-risk, allowing your team to scrutinize potentially fraudulent transactions more closely.
🔐 PCI Compliance Standards: (included in Sharpei!)
Ensure strict compliance with PCI standards to handle payment card information securely, minimizing the risk of credit card fraud and unauthorized access to sensitive data.
✔️ Integration of Advanced Verification Software: (included in Sharpei!)
Incorporate state-of-the-art verification software to authenticate customer information, enhancing the precision and efficiency of your anti-fraud measures.
🤖 Utilization of IP Fraud Scoring Tools: (included in Sharpei!)
Employ IP fraud scoring tools to evaluate the risk associated with specific IP addresses, enabling the identification of potential threats and the implementation of preventive actions.
By utilizing these strategies in your 2024 anti-fraud goals, you can begin to defend your business. But as we mentioned, all of these strategies are included with Sharpei, so why not give us a try! Start your free trial today.
As the world of “re-commerce” continues to grow, so does the threat of rental fraud. At Sharpei, we understand the importance of securing online transactions, for businesses and customers alike. You might be wondering, how do we do it? How do I prevent fraud for my online shop? In this article, we will talk about the most common types of fraud that affect e-commerce businesses, Sharpei’s unique anti-fraud algorithm, and some strategies for you to use this year.
Regardless of your background, discussing this topic is of utmost importance. According to our partner, Shopify, approximately $41 billion in e-commerce losses were reported in the US in 2022 due to online payment fraud, more than double the losses of 2021 (Shopify, 2022). Let’s take a step back though, and let’s understand the different types of fraud that contribute to this metric.
Types of E-commerce Fraud
In the landscape of e-commerce, businesses face a myriad of challenges (trust us, we know), but particularly in areas pertaining to fraudulent activities. This section will go into three significant facets – Refunds, Rentals, and Online Payments – each presenting distinctive challenges and financial consequences for merchants. From refund abuse to the pervasive threat of online payment fraud, businesses have to navigate a complex environment to safeguard their operations and financial well-being. Let's explore how these challenges unfold and how your business could be affected by their impact.
💸 Refunds: Refund abuse represents a form of e-commerce fraud in which customers return tems to a retailer, claiming they are broken, damaged, or stolen, with the intention of receiving a refund. Despite the strict return policies imposed by many merchants to define refund eligibility criteria, this remains a financially burdensome issue. According to the National Retail Federation, retailers face a loss of $10.40 for every $100 worth of returned merchandise due to this specific type of fraud. Notably, refund abuse saw the most substantial increase in online fraud incidents, with merchants reporting a significant 56% rise in such cases in 2022.
💰 Rentals: Similar to the former type of fraud, rentals can also be broken, damaged, or stolen.
One common tactic involves renters falsely claiming that the rented item was already damaged or defective when they received it. By asserting pre-existing issues, these individuals seek toavoid responsibility for any actual damage they cause during the rental period. In more severe cases, individuals might rent items with no intention of returning them, essentially stealing the product. This poses a significant challenge for businesses, as they not only lose the item itself but also potential revenue from future rentals.
💻 Online Payments: Instances of online payment fraud occur when fraudsters obtain someone else's payment information and utilize it to make unauthorized purchases on your e-commerce platform. This form of illegal action, commonly referred to as credit card fraud, may come about in scenarios where scammers replicate your website, leading unsuspecting customers to make purchases on a fraudulent site. Global retailers are grappling with the repercussions of online payment fraud, and the prevalence of this issue is notably high. In fact, merchants in Canada reported a significant 71% surge in online payment fraud cases last year (2021).
From dealing with refund abuse to tackling the constant challenge of online payment fraud, businesses operate in a tricky environment where they must protect their operations and finances. Now, shifting gears to how we help, our anti-fraud and risk algorithm is like a superhero guard.
Sharpei’s Anti-Fraud Algorithm
Our CTO and Co-Founder, Lucia Clifford, does a deep dive into Sharpei’s security measures and our goal to have the best anti-fraud algorithm ⬆️
Our anti-fraud and risk algorithm has been tested with hundreds of clients over several years.
Today, the reliability is around 90%. We analyze 3000+ data points for each individual, including demographic factors, Biometric analysis and credit score checks. We also have a risk database with shared information from all of our clients, if someone commits fraud in one of them, we won't let them rent anything from your store.
On top of that, Each time a client rents something in your website using Sharpei, they will have to accept both yours and Sharpei's "Terms and Conditions". Therefore, you can set your own terms and conditions for your rental service. You can do this by uploading a pdf document from the admin panel in the “Legal” section.
Now, if you aren’t a Sharpei customer (which you can be!), your business will need to take specific actions to ensure that it is fraud-free. So let’s turn our focus to some strategies designed to strengthen your security and shield your business against the intricate web of scams that exist.
Strategies For Your Business
As we recognize the evolving tactics used by fraudsters, it becomes imperative for enterprises to adopt a strategic approach to security. The following strategies are the most important to ensure safety for your business, as well as trust and security for your customers. Without further ado, here are the takeaways:
✍️ Manually Review Orders: (included in Sharpei!)
Implement a manual review process for orders flagged as high-risk, allowing your team to scrutinize potentially fraudulent transactions more closely.
🔐 PCI Compliance Standards: (included in Sharpei!)
Ensure strict compliance with PCI standards to handle payment card information securely, minimizing the risk of credit card fraud and unauthorized access to sensitive data.
✔️ Integration of Advanced Verification Software: (included in Sharpei!)
Incorporate state-of-the-art verification software to authenticate customer information, enhancing the precision and efficiency of your anti-fraud measures.
🤖 Utilization of IP Fraud Scoring Tools: (included in Sharpei!)
Employ IP fraud scoring tools to evaluate the risk associated with specific IP addresses, enabling the identification of potential threats and the implementation of preventive actions.
By utilizing these strategies in your 2024 anti-fraud goals, you can begin to defend your business. But as we mentioned, all of these strategies are included with Sharpei, so why not give us a try! Start your free trial today.
As the world of “re-commerce” continues to grow, so does the threat of rental fraud. At Sharpei, we understand the importance of securing online transactions, for businesses and customers alike. You might be wondering, how do we do it? How do I prevent fraud for my online shop? In this article, we will talk about the most common types of fraud that affect e-commerce businesses, Sharpei’s unique anti-fraud algorithm, and some strategies for you to use this year.
Regardless of your background, discussing this topic is of utmost importance. According to our partner, Shopify, approximately $41 billion in e-commerce losses were reported in the US in 2022 due to online payment fraud, more than double the losses of 2021 (Shopify, 2022). Let’s take a step back though, and let’s understand the different types of fraud that contribute to this metric.
Types of E-commerce Fraud
In the landscape of e-commerce, businesses face a myriad of challenges (trust us, we know), but particularly in areas pertaining to fraudulent activities. This section will go into three significant facets – Refunds, Rentals, and Online Payments – each presenting distinctive challenges and financial consequences for merchants. From refund abuse to the pervasive threat of online payment fraud, businesses have to navigate a complex environment to safeguard their operations and financial well-being. Let's explore how these challenges unfold and how your business could be affected by their impact.
💸 Refunds: Refund abuse represents a form of e-commerce fraud in which customers return tems to a retailer, claiming they are broken, damaged, or stolen, with the intention of receiving a refund. Despite the strict return policies imposed by many merchants to define refund eligibility criteria, this remains a financially burdensome issue. According to the National Retail Federation, retailers face a loss of $10.40 for every $100 worth of returned merchandise due to this specific type of fraud. Notably, refund abuse saw the most substantial increase in online fraud incidents, with merchants reporting a significant 56% rise in such cases in 2022.
💰 Rentals: Similar to the former type of fraud, rentals can also be broken, damaged, or stolen.
One common tactic involves renters falsely claiming that the rented item was already damaged or defective when they received it. By asserting pre-existing issues, these individuals seek toavoid responsibility for any actual damage they cause during the rental period. In more severe cases, individuals might rent items with no intention of returning them, essentially stealing the product. This poses a significant challenge for businesses, as they not only lose the item itself but also potential revenue from future rentals.
💻 Online Payments: Instances of online payment fraud occur when fraudsters obtain someone else's payment information and utilize it to make unauthorized purchases on your e-commerce platform. This form of illegal action, commonly referred to as credit card fraud, may come about in scenarios where scammers replicate your website, leading unsuspecting customers to make purchases on a fraudulent site. Global retailers are grappling with the repercussions of online payment fraud, and the prevalence of this issue is notably high. In fact, merchants in Canada reported a significant 71% surge in online payment fraud cases last year (2021).
From dealing with refund abuse to tackling the constant challenge of online payment fraud, businesses operate in a tricky environment where they must protect their operations and finances. Now, shifting gears to how we help, our anti-fraud and risk algorithm is like a superhero guard.
Sharpei’s Anti-Fraud Algorithm
Our CTO and Co-Founder, Lucia Clifford, does a deep dive into Sharpei’s security measures and our goal to have the best anti-fraud algorithm ⬆️
Our anti-fraud and risk algorithm has been tested with hundreds of clients over several years.
Today, the reliability is around 90%. We analyze 3000+ data points for each individual, including demographic factors, Biometric analysis and credit score checks. We also have a risk database with shared information from all of our clients, if someone commits fraud in one of them, we won't let them rent anything from your store.
On top of that, Each time a client rents something in your website using Sharpei, they will have to accept both yours and Sharpei's "Terms and Conditions". Therefore, you can set your own terms and conditions for your rental service. You can do this by uploading a pdf document from the admin panel in the “Legal” section.
Now, if you aren’t a Sharpei customer (which you can be!), your business will need to take specific actions to ensure that it is fraud-free. So let’s turn our focus to some strategies designed to strengthen your security and shield your business against the intricate web of scams that exist.
Strategies For Your Business
As we recognize the evolving tactics used by fraudsters, it becomes imperative for enterprises to adopt a strategic approach to security. The following strategies are the most important to ensure safety for your business, as well as trust and security for your customers. Without further ado, here are the takeaways:
✍️ Manually Review Orders: (included in Sharpei!)
Implement a manual review process for orders flagged as high-risk, allowing your team to scrutinize potentially fraudulent transactions more closely.
🔐 PCI Compliance Standards: (included in Sharpei!)
Ensure strict compliance with PCI standards to handle payment card information securely, minimizing the risk of credit card fraud and unauthorized access to sensitive data.
✔️ Integration of Advanced Verification Software: (included in Sharpei!)
Incorporate state-of-the-art verification software to authenticate customer information, enhancing the precision and efficiency of your anti-fraud measures.
🤖 Utilization of IP Fraud Scoring Tools: (included in Sharpei!)
Employ IP fraud scoring tools to evaluate the risk associated with specific IP addresses, enabling the identification of potential threats and the implementation of preventive actions.
By utilizing these strategies in your 2024 anti-fraud goals, you can begin to defend your business. But as we mentioned, all of these strategies are included with Sharpei, so why not give us a try! Start your free trial today.
As the world of “re-commerce” continues to grow, so does the threat of rental fraud. At Sharpei, we understand the importance of securing online transactions, for businesses and customers alike. You might be wondering, how do we do it? How do I prevent fraud for my online shop? In this article, we will talk about the most common types of fraud that affect e-commerce businesses, Sharpei’s unique anti-fraud algorithm, and some strategies for you to use this year.
Regardless of your background, discussing this topic is of utmost importance. According to our partner, Shopify, approximately $41 billion in e-commerce losses were reported in the US in 2022 due to online payment fraud, more than double the losses of 2021 (Shopify, 2022). Let’s take a step back though, and let’s understand the different types of fraud that contribute to this metric.
Types of E-commerce Fraud
In the landscape of e-commerce, businesses face a myriad of challenges (trust us, we know), but particularly in areas pertaining to fraudulent activities. This section will go into three significant facets – Refunds, Rentals, and Online Payments – each presenting distinctive challenges and financial consequences for merchants. From refund abuse to the pervasive threat of online payment fraud, businesses have to navigate a complex environment to safeguard their operations and financial well-being. Let's explore how these challenges unfold and how your business could be affected by their impact.
💸 Refunds: Refund abuse represents a form of e-commerce fraud in which customers return tems to a retailer, claiming they are broken, damaged, or stolen, with the intention of receiving a refund. Despite the strict return policies imposed by many merchants to define refund eligibility criteria, this remains a financially burdensome issue. According to the National Retail Federation, retailers face a loss of $10.40 for every $100 worth of returned merchandise due to this specific type of fraud. Notably, refund abuse saw the most substantial increase in online fraud incidents, with merchants reporting a significant 56% rise in such cases in 2022.
💰 Rentals: Similar to the former type of fraud, rentals can also be broken, damaged, or stolen.
One common tactic involves renters falsely claiming that the rented item was already damaged or defective when they received it. By asserting pre-existing issues, these individuals seek toavoid responsibility for any actual damage they cause during the rental period. In more severe cases, individuals might rent items with no intention of returning them, essentially stealing the product. This poses a significant challenge for businesses, as they not only lose the item itself but also potential revenue from future rentals.
💻 Online Payments: Instances of online payment fraud occur when fraudsters obtain someone else's payment information and utilize it to make unauthorized purchases on your e-commerce platform. This form of illegal action, commonly referred to as credit card fraud, may come about in scenarios where scammers replicate your website, leading unsuspecting customers to make purchases on a fraudulent site. Global retailers are grappling with the repercussions of online payment fraud, and the prevalence of this issue is notably high. In fact, merchants in Canada reported a significant 71% surge in online payment fraud cases last year (2021).
From dealing with refund abuse to tackling the constant challenge of online payment fraud, businesses operate in a tricky environment where they must protect their operations and finances. Now, shifting gears to how we help, our anti-fraud and risk algorithm is like a superhero guard.
Sharpei’s Anti-Fraud Algorithm
Our CTO and Co-Founder, Lucia Clifford, does a deep dive into Sharpei’s security measures and our goal to have the best anti-fraud algorithm ⬆️
Our anti-fraud and risk algorithm has been tested with hundreds of clients over several years.
Today, the reliability is around 90%. We analyze 3000+ data points for each individual, including demographic factors, Biometric analysis and credit score checks. We also have a risk database with shared information from all of our clients, if someone commits fraud in one of them, we won't let them rent anything from your store.
On top of that, Each time a client rents something in your website using Sharpei, they will have to accept both yours and Sharpei's "Terms and Conditions". Therefore, you can set your own terms and conditions for your rental service. You can do this by uploading a pdf document from the admin panel in the “Legal” section.
Now, if you aren’t a Sharpei customer (which you can be!), your business will need to take specific actions to ensure that it is fraud-free. So let’s turn our focus to some strategies designed to strengthen your security and shield your business against the intricate web of scams that exist.
Strategies For Your Business
As we recognize the evolving tactics used by fraudsters, it becomes imperative for enterprises to adopt a strategic approach to security. The following strategies are the most important to ensure safety for your business, as well as trust and security for your customers. Without further ado, here are the takeaways:
✍️ Manually Review Orders: (included in Sharpei!)
Implement a manual review process for orders flagged as high-risk, allowing your team to scrutinize potentially fraudulent transactions more closely.
🔐 PCI Compliance Standards: (included in Sharpei!)
Ensure strict compliance with PCI standards to handle payment card information securely, minimizing the risk of credit card fraud and unauthorized access to sensitive data.
✔️ Integration of Advanced Verification Software: (included in Sharpei!)
Incorporate state-of-the-art verification software to authenticate customer information, enhancing the precision and efficiency of your anti-fraud measures.
🤖 Utilization of IP Fraud Scoring Tools: (included in Sharpei!)
Employ IP fraud scoring tools to evaluate the risk associated with specific IP addresses, enabling the identification of potential threats and the implementation of preventive actions.
By utilizing these strategies in your 2024 anti-fraud goals, you can begin to defend your business. But as we mentioned, all of these strategies are included with Sharpei, so why not give us a try! Start your free trial today.
In our vision of the future, everything is available on a pay-as-you-go basis, and products are regularly rotated to promote a sustainable world. 💚
Product
Company
Copyright © 2023 Sharpei. All Rights Reserved
In our vision of the future, everything is available on a pay-as-you-go basis, and products are regularly rotated to promote a sustainable world. 💚
Product
Company
Copyright © 2023 Sharpei.All Rights Reserved
In our vision of the future, everything is available on a pay-as-you-go basis, and products are regularly rotated to promote a sustainable world. 💚
Product
Company
Copyright © 2023 Sharpei. All Rights Reserved
In our vision of the future, everything is available on a pay-as-you-go basis, and products are regularly rotated to promote a sustainable world. 💚
Product
Company
Copyright © 2023 Sharpei.
In our vision of the future, everything is available on a pay-as-you-go basis, and products are regularly rotated to promote a sustainable world. 💚
Product
Company
Copyright © 2023 Sharpei.All Rights Reserved