WooCommerce Fraud Prevention: Tools and Strategies to Protect Your Store

You’ve set up WooCommerce for your WordPress site, and orders are coming in — your online store is growing just like you planned! But preventing fraud is an important step you can’t skip.

The truth is stark: Online businesses lose $4.611 for every $1 lost to fraudulent activities. Fraudsters might try slipping through the cracks with stolen cards, fake orders, and sly account takeovers every chance they get.

You don’t have to be a cybersecurity guru to protect your store. To help you get started, let’s explore some solid WooCommerce fraud prevention strategies to run your store confidently. 

Key Takeaways

• Fraud hits WooCommerce stores in multiple forms, from credit card fraud to account takeovers to spam orders.
• Using fraud prevention plugins, secure gateways, and additional verification techniques can protect your store.
• Staying proactive and current on industry trends keeps fraudsters at bay.
• Acting immediately when you spot suspicious accounts goes a long way to preventing fraud.

Understanding WooCommerce Fraud 

Before jumping into fraud prevention for WooCommerce, understand what fraud you’re facing.

Fraud generally occurs when an individual or entity deliberately uses deceptive practices to obtain financial or personal gain. These actions are carried out with the intent to mislead, manipulate, or exploit others, often resulting in monetary loss or compromised personal information for the victim. Fraud can take many forms, from financial scams, identity theft, chargeback schemes, and the deliberate misrepresentation of facts. Each type of fraud involves a breach of trust and may target individuals, businesses, or institutions.

What is WooCommerce Fraud?

WooCommerce fraud happens when someone uses shady tactics to exploit your WooCommerce store to steal money or products from you. 

A popular form of WooCommerce fraud is friendly fraud or first-party fraud. This happens when a fraudster uses a stolen credit card to make a purchase, then later disputes the charge with their bank once the item is received, keeping both the item and returned fee.

Today’s cybercriminals are sophisticated and crafty. They use several tactics to commit fraud, such as credit card scams, fake orders, or hijacking a customer’s account. 

Common Types of WooCommerce Fraud

• Credit Card Fraud: This is the most common type of WooCommerce fraud. It happens when someone uses a stolen credit card to buy goods from your store. If the real owner disputes the transaction, you must handle the chargeback headache.
• Account Takeover: This occurs when a fraudster cracks a customer’s weak passwords or obtains their login credentials through shady means, such as credential stuffing. They then log into the customer’s account to siphon funds or go on a shopping spree. 
• Chargeback Fraud: Also called “friendly fraud,” this happens when a customer buys a product from your store and keeps it but claims they never got it to snag a refund. 
• Spam Order: This happens when a malicious actor or bot places fake orders to clog your store, so you waste valuable resources and time there.

The Impact of WooCommerce Fraud on Online Stores

No WooCommerce owner gets into business expecting to fall victim to fraud, but it can happen if you don’t have fraud prevention strategies in place. Fraud can ripple across your entire operation, causing several serious issues.

Fraud can lead to additional costs for your store, including extra shipping fees, legal expenses, and customer support costs. 

These can accumulate quickly and hurt your profits, especially if you run a smaller store with tight margins.

Payment processors may bump up your processing fees if they notice too many chargebacks. This might be problematic for high-risk e-commerce businesses as they scramble to find suitable providers. 

As the saying goes, it takes years to build a reputation and seconds to destroy it; this is precisely what fraud does. 

Legit customers can move to the competition in a jiffy! They may lose trust after suffering delays, canceled orders, or stolen data and share their experience with others in the form of bad reviews.

When fraud strikes, you may be unable to process new orders or payments, your marketing data may become less trustworthy, and you can’t ship anything. This operational strain on your WooCommerce business can have a real impact on your bottom line.

How To Prevent Fraud in WooCommerce

Fraud can be a mess to deal with. But does that mean sit back and relax, hoping it doesn’t happen?

Absolutely not! 

Instead, take the following fraud prevention steps for WooCommerce.

Use a WooCommerce Fraud Prevention Plugin

With a fraud protection plugin, WooCommerce store owners can be proactive rather than wait and act when fraudsters strike. 

While many of these plugins exist, WooCommerce Anti-Fraud by OPMC and FraudLabs Pro have become favorites for many store owners. With features such as:

•  IP address checks
• Order velocity monitoring
• Customizable risk thresholds

Integrate Secure Payment Gateways

A payment gateway is an intermediary between the customer and your business — it processes the online transaction, notifies you that the payment was successful, and deposits the customer’s money in your account.

Secure payment gateways use encryption and adhere to PCI-DSS compliance standards to secure the transaction process.

Detecting and Responding to Fraudulent Activity

Sometimes, fraud will infiltrate your store no matter how much you try. But how you respond when it does can mean a whole world of difference.

A payment gateway is an intermediary between the customer and your business. It processes the online transaction, notifies you that the payment was successful, and deposits the customer’s money in your account.

Secure payment gateways use encryption and adhere to PCI-DSS compliance standards to secure the transaction process.

Detecting and Responding to Fraudulent Activity

Sometimes, fraud will infiltrate your store no matter how much you try. But how you respond when it does can mean a whole world of difference.

You might be able to easily spot certain fraudulent activities and eliminate them before they affect your business. 

Sometimes, they might not be as clear, especially when dealing with sophisticated fraudsters. Look for these indications of fraudulent activity in your WooCommerce store: 

• Orders with mismatched billing and shipping information
• New accounts that buy a truckload of goods
• Back-to-back purchases from fraudsters trying to maximize their opportunity before you notice

If your WooCommerce plugin or payment gateway notifies you of fraud, contact the customer to confirm the order is legitimate. If it is, complete the transaction; if not, shut it down and save yourself from the stress of chargebacks. 

Preventing Account Takeover (ATO) and Credential Stuffing

Throughout 2023, ATO fraud racked up to $13 billion in losses.² The good news is, with a few security measures, it’s possible to lock out bad actors:

• Strong Passwords: Requiring your customers to use strong passwords can prevent account takeovers — ideally, passwords shouldn’t exceed below 12 characters and should contain a symbol or two.
• CAPTCHA: Fraudsters can use bots to attempt to break into customers’ accounts. Implementing CAPTCHA systems stops bots in their tracks, preventing them from automating login attempts.
• Multi-factor authentication: MFA beefs up account protection by supplementing your customers’ passwords with a new factor, like a fingerprint or a one-time code sent to their email address.

Customers are the lifeblood of your store, but in some cases, they might also be its biggest undoing. Keeping tabs on user activity can help pinpoint and nullify suspect activity before it leads to fraudulent orders.

Optimizing WooCommerce Fraud Prevention

Once you’ve implemented a secure payment gateway and a few ATO prevention measures, you can continue to protect your business with an ongoing fraud prevention strategy.

Rest assured, fraudsters are consistently upping their game. Chances are, they won’t employ a tactic they utilized yesterday if there’s something better out there. 

Staying atop the latest and greatest fraud trends is a great way to outwit them.

How, you ask? 

To start, upgrade your WooCommerce anti-fraud plugin and payment gateway security. Two, look for industry webinars to participate in to learn about fraud prevention tactics that are working for other stores.

Your WooCommerce store’s needs, target audience, and risks are unique. Your prevention strategy should be just as unique.

If, for instance, your store handles high-ticket items, employing stricter verification measures should be the next logical step. 

While a small shop might lean on basics, a high-risk WooCommerce or Shopify operation calls for top-tier fraud prevention. In other words, the more customized your fraud measures, the higher the chances of neutralizing nuanced, store-specific risks.

Protect Your WooCommerce Store from Fraud

Fraud is, without a doubt, the Achilles’ heel of most online store owners. With PaymentCloud, WooCommerce fraud prevention is easy.

High-risk eCommerce fraud prevention is our forte. Over the years, we’ve fine-tuned our approach and elevated our tools to ensure you have the full ammunition — the power to keep bad actors off of your e-commerce enterprise once and for all. 

Ready to get started? Learn more about how PaymentCloud’s advanced fraud protection measures can help you secure your online store against WooCommerce fraud.

Stop fraud in its tracks

PaymentCloud has a 98%
approval rating.

Create a High-Risk
Merchant Account today

100%

Secure