Although even before COVID-19, e-commerce businesses were growing at a constant pace, the pandemic gave a massive boost to it. While people were at home and had nowhere to go, they invested their time online, either scrolling at online products or creating new apps/websites for people’s use. While users were shifting to online mode of shopping, many businesses also adopted digital means to provide their products or services to the new digital audience. Seeing this growth in digital transactions, scammers started to invade to steal information, money, and the trust of people in these digital innovations.
About 75% of e-commerce merchants noticed an increase in scam attempts in the past two years. On one side, there is a boom in online businesses, and on the other, scam rates are causing huge losses to merchants. Considering these growing e-commerce scam rates, we talked to Faisal Abidi, Co-Founder of RNF Technologies, a company that deals with providing creative tech solutions and digital products to businesses all over the world. We asked him to shed light on these retail scams and how these scammers are tricking people into such scams.
Faisal Abidi, RNF Technologies, shares that scammers use different ways and schemes to not only get credit card or bank details but also try to invade the laptops, mobiles, and tablets of e-commerce retailers. Let’s discuss the schemes adopted by scammers targeting e-commerce businesses.
Schemes Adopted By Scammers, Underlined By RNF Technologies’ Faisal Abidi
- Identity Theft Scam
Identity theft occurs when scammers gain access to a customer’s account details on an e-commerce website and use them to make a purchase. The details may include passwords, security codes, or financial information. Faisal Abidi, RNF Technologies, highlights that even though the scammer made the fake purchase using the customer’s details, customers will find the e-commerce website to be vulnerable. Even though the customer will ask for returns on this fake purchase done by scammers, they will refrain from making any further purchases on that particular website. Identity thefts affect card owners and the reputation of e-commerce businesses.
- Triangular Scam
This type of scam involves three entities – a scammer, a legitimate shopper, and an e-commerce store. Here, the legitimate shopper places an order on the e-commerce website, and the scammer claims to deliver the product at a lower amount. In contrast, it buys the outcome from a legitimate store using another person’s stolen card details and adding the shopper’s delivery address. The shopper sent the money to this scammer. Further, the card’s owner, whose details were entered while making the purchase, asks for a refund from the e-commerce store. Faisal Abidi of Phonato Studios, a product development arm of RNF Technologies, spotlights how the store loses both the product, money, and reputation in this triangular scam.
- Chargeback Scam
Faisal Abidi of Phonato Studios shares that chargeback scams are the most common type of e-commerce scams. In this, a shopper asks for a cashback claiming that their account was hacked and the scammers made the purchase. It’s challenging to recognize whether the person is lying or not. But, the retailers have to pay back the shoppers and transaction fees and lose their inventory to the scammers. Also, they have to deal with high transaction fees if too many chargebacks are filed at a particular time.
These are some of the most retail scams experienced by online e-commerce stores and affect their sales and reputation. Faisal Abidi, Phonato Studios, shares that although e-commerce is a booming sector, it still needs to update its security and verification steps to persist longer. Otherwise, these scammers will make it difficult for people to rely on online shopping.