“Cyberthieves are proving quite adept at using both technology and stolen payment card data to attain their ill-gotten gains.” Research and Markets published that finding in a January 2017 report titled Card-Not-Present Fraud: The Merchant Empire Strikes Back.

The report describes a perfect storm facing ecommerce merchants today — leaving them vulnerable to CNP (card not present) fraud.

What’s the perfect storm? Researchers identified it as rapidly growing online sales occurring amidst the US EMV chip card transition.

Payments experts on the US Payments Forum Working Committee declared in their whitepaper CNP Fraud Around the World that the growth in CNP fraud relates more to growth in ecommerce in general, rather than the US EMV card transition.

While a causal link between chip cards and increased online fraud is a matter of some industry debate, it’s clear that the bad guys don’t care. They’ll steal happily either in person at a store or online if they can.

The ecommerce merchant empire doesn’t debate whether protecting customers’ information is crucial to online business success. But they do want to know how to prevent CNP fraud.

As Obi-Wan Kenobi said in Episode IV — A New Hope — “In my experience there is no such thing as luck.” So don’t rely on luck… let’s look at what Jedi payments masters say to the question of what you can do to prevent CNP fraud.

Fraud-Related Chargebacks — A Cost of Doing Business?

Yes they are. But that doesn’t mean you should just lie down and take it. If you prevent CNP fraud customers are better protected from credit card theft and scams… and damage to your online sales from chargebacks and fraudulent transactions declines.

CNP fraud-related chargebacks cost online merchants in the form of lost transaction revenues, related merchandise, chargeback fees, and the costs associated with disputing or responding to them. All of which can add up to a significant amount of damage to online sales.

7 Tips To Help Prevent CNP Fraud

Ecommerce merchants can reduce or prevent CNP fraud by adopting appropriate policies and best practices to reduce online fraud vulnerability — both the true and friendly sorts.

Try these tips:

  1. Ensure your ecommerce website employs robust, current fraud-prevention technology. At a minimum you must achieve and maintain Payment Card Industry’s Data Security Standard (PCI DSS) compliance. These standards help ensure that online customers and merchants are protected from digital fraud. Major card brands can impose large fines if you fail to maintain compliance so don’t neglect this.

Insist on a secure PCI-compliant payments gateway when choosing your payments processing partner. Look for a gateway that allows card payments via multiple devices; provides quick, secure account verification; includes advanced management features to improve your business operations; and complete fraud prevention and administrative tools for enhanced business protection. The right gateway will help you prevent CNP fraud.

  1. Always require Address Verification (AVS) Card Code Verification (CVV) in your payments gateway. Harness AVS within your payment service so you can ensure that the address the credit card user enters online matches the billing address of the purchaser — the actual card owner who will be charged.

It’s also a good idea to choose an ecommerce platform that offers security protocols that automatically recognize suspicious IP addresses or discrepancies. In other words, does the IP location of the person entering the order match the card’s billing address location?

  1. Screen your payment gateway for fraudulent transactions using a robust, recurring process. Certain order characteristics may indicate ecommerce fraud. These include rapid-delivery and very large orders. Fraudsters often try to complete several large orders in rapid succession using a stolen card, before the legitimate cardholder files a report.
  2. Be sure to require strong passwords that meet best practices for ecommerce fraud prevention if your website allows customers to create online customer profiles to facilitate repeat orders. Best practices include a minimum number of characters, and a combination of letters, numbers, and symbols. Many password strength checkers are commercially available, and website vendors may offer their own.
  3. Develop and document a robust fraud prevention policy and showcase it on your ecommerce website. Fraudsters are less likely to try fraudulent activity on a site when they know the merchant has active fraud detection systems in-place. And never hesitate to cancel an order if a transaction appears fraudulent. Such resolve helps prevent CNP fraud.
  4. Retain a copy of all transaction receipts and product shipments for your records. If you choose to dispute a chargeback, you’ll need to submit copies of this documentation to facilitate resolution. Store transaction records somewhere safe and convenient, as you must respond to your processor within the (limited) timeline communicated along with the chargeback.
  5. Treat Your Customers Well. Recognize that poor customer service is often the root cause of chargeback issues. As a merchant you’re in control of customer service. You can manage and improve it to retain customers and reduce your chargeback rate over time.
  • Be sure products and services live up to the promises made.
  • Employ an easy-to-use payment process that includes appropriate security measures.
  • Practice excellent customer communication to include email confirmation of orders and shipments.
  • Require signatures on order deliveries.
  • Ensure your billing descriptor is recognizable to your customers. Use your business name.


Choosing the right payments partner is one of the best ways to ensure your online storefront includes strong ecommerce fraud prevention capabilities to help battle the dark side and prevent CNP fraud.

Select a payments processor who’s expert in the payments industry, who understands your business model, and listens carefully to your unique business needs before suggesting the right processing solution for your business.

Let your Jedi payments master show you the way to processing success that’s out of this world — but not far, far away.