Back to Ganoksin | FAQ | Contact

Internet fraud against jewelers


#1

I hope it is OK to take what Loren wrote to start a new thread.

Selling precious jewelry on the Internet or by mailorder invites a
certain level of risk for credit card fraud. I think it would be a
good topic to chew on a little bit.

In my own experience the scams seem to come in waves. Large foreign
orders came in all the time for a while. When we checked for credit
card name and address match they were never right. It was amazing
how uninterested the banks were in this. They would say “no that’s
not right, don’t ship it.” and never even ask where it was supposed
to go. You got the idea that they were not even going to bother
telling their customer that someone else was trying to use their
card. Now we always ask to talk to their fraud department if this
happens.

Several times we have had charge backs that we were pretty sure were
actually ordered by the real credit card holder but shipped to other
addresses so they could weasle out of payment. But on the other
hand, plenty of times when someone is getting married there are very
good and real reasons that their billing address is not going to
match. A lot of people move at the same time they get married or are
traveling for the wedding. I always send an invoice to the billing
address even if the shipment is going somewhere else and this has
caught at least one scamster.

Stephen Walker

PS. I also enjoyed the Orchid dinner in NY very much, as did my wife
Susan and apprentice Danielle. I saw several of you guys that I have
not seen in a decade and also met face to face names that I see
regularly on the forum. Glad I joined this group.


#2

All;

Here are few pointers to consider when processing an online order.

All internet orders should be considered fraudant unless proven
otherwise!

Your Online credit card payment provider will provide you with an
authorization to charge your customer account if the card is valid.
Otherwise the card will be rejected.

IT IS YOUR responsibility is to verify that the card owner was the
one who placed the order and not someone else!.

  1. Verify the AVS (Address Verification System). Don’t ship unless
    both the address and the zip code submitted match the bank’s records.
    (AVS=4)

  2. Use CVV1 and CVV2 verification. CVV are those 3 digits that are
    not embossed on the card. (3 digits to MasterCard and visa, 4 digits
    to American Express). A match will give you loose indication that the
    card is at the possession of your customer.

  3. Evaluate the order. Most internet users will NOT place an order on
    their first visit to your site. The Internet standards are 4.5 visits
    before actually placing an order. Have your system track this
    variable and pay an extra caution for those who place an order on
    first visit. I like to call it “The Shake hand factor” (SH>0 is fine)
    SH factor which very high, lets say 30, might result of a bad site
    design…

  4. Compare the order $ value against the average online sale value of
    your market. FYI Gem and jewelry online sales average at $ 254.

  5. If you have a shopping cart installed. Be extra cautious for
    orders submitted by email, especially from free web based email
    account (hotmail etc)

  6. Evaluate the order composition. 2,000$ order shipped by 8$ airmail
    smells fishy…

  7. Always have a proof of shipment, FedEx airbill for example. It
    will help you resolve chargebacks.

  8. Get the IP of your user and resolve it to its geographical
    location. You may surprise how many honest looking orders resolves to
    Russia, Indonesia and other online fraud centers. here is a good tool
    that you can freely use

http://www.networldmap.com/TryIt.htm?GetLocation

  1. Consider blocking access to your site from countries of high risk,
    or countries that you don’t have an intention to serve. This can be
    done based on the user IP. A great service is GeoIP Free Country, by
    MaxMind - http://www.maxmind.com/app/geoip_country

  2. Determine your risk factor. Online credit card payment ARE RISKY,
    you can limit the $ value orders you are willing to accept online.
    For greater amounts ask for a wire transfer…

  3. Most important - Be calm. Don’t rush to ship until you are
    positive that all signs indicate an honest transaction. If you have
    just a tiny suspicion, ask your customer to FAX you an authorization
    form.

Hope it helps
Hanuman


#3

Indeed My Fellow Orchadians!

There is much illegal attempts to get you to send , give
Collect millions for giving them your info {ha ha}, and
the best one of all. Hi I’d like to purchase what you have
advertized, I will send a postal money order to cover the cost! Ha!
Whata crock, their everywhere so beware!

Ringman John Henry


#4

We had our identity stolen early on and in attempting to find the
perpetrators (Nigerian ring) we were similarly stunned at the lack
of desire to locate or prosecute.

I was told that the credit card companies loose less than 1/10 of 1%
on such fraud so they mostly expect to write it off and since the
crime involves no bloodshed, it isn’t a very high priority for law
enforcement.

Pam Chott
www.songofthephoenix.com


#5
       There is much illegal attempts to get you to send , give
Collect millions for giving them your info {ha ha},
and the best one of all. Hi I'd like to purchase what you have
advertized, I will send a postal money order to cover the cost!
Ha! Whata crock, their everywhere so beware! 

Hi, Could you enlighten me on how they can get for fraud
from we would send for a postal money order to be sent
to us. I’m not being a smart alec I really am clueless.

Thanks, Deanna


#6

Wow, Hanuman, thanks! I’m one of those who is not yet set up for
internet sales, but hope to be soon, and your primer is stuff I
might never have thought of. I feel as though I’ve dodged a bullet
just by reading this. In fact, if you don’t object, I will print it
in the Chicago Metal Arts Guild newsletter (with credit, of course).

–Noel


#7
    Hi, Could you enlighten me on how they can get for
fraud from we would send for a postal money order to be
sent to us. I'm not being a smart alec I really am clueless. 

Postal mail orders can be stopped in much the same way checks can.
They have your merchandise, and you have a worthless piece of paper.

Elizabeth Schechter
RFX Studios