If you run an e-commerce store, you already know that protecting your business from fraud isn’t just important—it’s essential.
Digital security is more critical than ever, especially with fraud attempts increasing sharply in recent years. Following the post-COVID surge in online shopping, fraudulent purchase attempts spiked by 80% globally in 2023, compared to pre-pandemic levels, and the trend continues.
Unfortunately, there’s no single solution that protects every business from every threat. But by understanding the risks and taking proactive steps, you can significantly reduce your exposure to scams and chargebacks.
What Is an Online Scam?
An online scam involves someone fraudulently obtaining money or goods using deception, usually over the internet. These scams can take many forms—from phishing emails and fake invoices to stolen credit card use or identity theft.
Many small businesses moved quickly to e-commerce during the pandemic, often without time to properly set up fraud controls—making them a common target for cybercriminals.
Why Online Security Matters
If your business stores or processes personal data (credit card numbers, passwords, or customer records), then you’re a target. Being the victim of fraud can result in:
- Lost inventory and shipping costs
- Chargeback fees
- Damaged reputation and customer trust
- Loss of merchant account privileges
Fraud isn’t just about stolen products—it’s about lost time, money, and credibility.
Types of Online Scams to Watch For
1. Phishing Emails
Scammers send emails that look like they’re from banks, government agencies, or service providers. These emails include fake login pages or malware-laced attachments.
💡 Prevention tip: Use email filtering, train staff to spot phishing attempts, and always verify suspicious messages with the official source.
2. Fake Invoices
These appear legitimate and may request immediate payment for services or products your business never ordered.
💡 Prevention tip: Maintain a centralized invoicing system to verify all incoming invoices against authorized purchases.
3. Card-Not-Present (CNP) Fraud
Occurs when a stolen credit card is used for online purchases. You ship the goods, but the real cardholder later files a chargeback.
💡 Prevention tip: Use advanced fraud tools like tokenization, 3D Secure, and address verification systems (AVS).
4. Friendly Fraud
A customer receives their order and then falsely disputes the charge with their bank. Some even use professional refunders to exploit the chargeback process.
💡 Prevention tip: Keep detailed transaction records, delivery confirmations, and signed receipts when possible.
5. Government Imposter Scams
Cybercriminals impersonate government agencies and pressure business owners with threats, asking for immediate payment or personal data.
💡 Prevention tip: Verify all communications directly with the actual agency through its official website or phone line.
6. Account Takeover (ATO)
A fraudster gains access to a customer’s account and makes unauthorized purchases using stored payment data.
💡 Prevention tip: Require two-factor authentication (2FA) or biometric logins and monitor for unusual login activity.
How to Spot Potential Fraud
- Unusual order behavior: Multiple failed payment attempts or unusually high-value orders
- Mismatched data: Billing address far from the shipping location, or masked IP addresses
- Repeated chargebacks: May indicate friendly fraud or organized refund abuse
If something feels off—investigate before fulfilling the order.
How to Protect Your Online Store
- Train Employees
Educate your team on cyber threats and how to identify red flags. - Use Secure Communication Channels
Never share sensitive info (like passwords) over email or unencrypted platforms. - Validate Invoices and Payments
Establish a reliable invoicing approval process to catch fake requests. - Conduct Security Audits
Run regular checks for vulnerabilities, including penetration testing and phishing simulations. - Implement Advanced Payment Tools
Use fraud detection tools like KORT’s tokenization, real-time monitoring, velocity filters, and customer vault security.
Stay Vigilant. Stay Secure.
Keeping your online store safe from fraud takes ongoing effort. But by staying informed and proactive, you can protect your revenue and your reputation.
KORT is committed to helping merchants like you operate confidently and securely with built-in fraud prevention tools and hands-on support.