Comparing Billing and Shipping Addresses for Fraud Prevention
One of the first things eCommerce merchants do when reviewing a possibly-fraudulent order is ask, "do the billing and shipping addresses match?" This test seems too simple to be helpful - after all, MANY totally legitimate orders will have different bill-to and ship-to addresses. And MANY fraudulent orders will have matching bill-to and ship-to addresses.
This is a case where you need to know your customers. The combination of your own expertise and a few common patterns can turn this often-dismissed piece of data into a powerful weapon in your fraud prevention arsenal.
Know Your Customer
The most important thing to know before you begin is who buys your products. Are they gifts? Office supplies? Home goods? Do people buy from home and have them shipped to work? Knowing your product and your customers can help you build mental models of common ordering patterns.
Shipping To The Office
If you sell expensive items you may notice this pattern: billing address and shipping address share the same name, but billing address has a company name and a different address. Sometimes the email address will appear to be a work email, but other times the personal email will be used.
The Birthday Gift
Gifts often show up as different billing and shipping addresses. Why have the present sent to your house if you're just going to pack it up and send it to an out of town friend or relative? Often, the customer and the recipient will share the same surname. Very often, gift wrapping or a gift note is included.
Although every business has different purchase patterns, there are some general patterns to keep in mind
- Gifts are usually not bulk orders. For most stores, an unusually large order is unlikely to be a gift.
- Gift notes are usually addressed to the recipient. Look for the recipient's name, or something that could be a nickname, in the gift note.
- For orders that look like the customer shipping to themselves at work, a few minutes of searching can help you verify the business address.
- Learn your repeat purchase profile. Depending on your selling patterns, a first-time customer might need extra scrutiny, or a repeat customer might.
Know Your Customer
I said that above, but it's important enough to repeat. Without knowing your customers, it's very hard to use billing and shipping addresses as any kind of predictive data. Spend some time looking at common patterns in your orders, learning about who buys, how much they buy, when they buy, and where they send it. Then you'll be able to use this incredibly simple piece of data in very powerful ways!
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