eCommerce Insiders

How to Spot and Prevent Fraudulent Orders

Wasn’t it only a couple of years ago when the most common problem online retailers faced were people simply unable to pay for their goods?

Back then many people didn’t own a credit card, or a Paypal account. Or, as it was a case with many, they didn’t trust the internet enough to risk ordering online.

Today however, this is a problem long gone and a lack of trust or resources has been replaced by dishonest of many buyers.

There is a growing number of people willing to take advantage of security holes in the online buying process or the naiveté of many Ecommerce retailers in order to get stuff for free.

If you run, or even think of starting an online store, fraudulent orders and online order fraud are definitely problems you have to watch out for. Sooner or later a dishonest buyer will find his or hers way to your store, unfortunately.

The good news is there are ways to spot a fraud before it hits you. This is what I will discuss in this post.

How to Spot a Fraudulent Order

Before we begin, let me clarify something though:

There is no automation in this process. I am often asked about tools that could be put in place to spot fraudulent orders but I am afraid, there are none.

You have to learn how to detect an online order fraud yourself, analyzing each order and looking for what I usually refer to as red flags – things that are suspicious, things that immediately stand out.

Here are some of the most common ones:

Different Bill To And Shipping Address

This is almost a given, a fraudulent order will have a different bill to and shipping address. And, the shipping one is usually a storage facility, some remote warehouse or a Mailbox Plus.

Whenever you receive an order with different addresses, fire off Google Maps and check both addresses. You will be very quickly able to assess if the order is genuine by checking what is the shipping location.

Naturally though, it doesn’t mean that every order with different addresses is fraudulent. There are many situations where honest people will ship goods to a different address, for various reasons.

To offer a quick example, only last week I received an order with a bill to address in Canada and shipping address in the US. I flagged it immediately, however, a quick call revealed that since I do not ship to Canada, the buyer decided to use an address of someone they know in the US (only stones thrown away from her Canadian location by the way) to be able to receive the goods.

Phone Numbers From A Different State Or A Free Service

When it comes to fraudulent orders, quite often the number you receive is a free service in another state or even a completely random number.

If you notice something suspicious, the best solution is always to grab a phone and dial the number. Within seconds you will be able to realize whether the order is fraudulent or not.

Here are few other things you can do:

  • Google the phone number. Chances are, unfortunately, that you are not the first one a thief might have been trying to steal from using that number. A quick Google search can reveal if there are any mentions of the number anywhere, especially in relation to online order fraud.
  • If, upon dialing the number you get to an answering machine, leave a message and wait at least 2 days before deciding what to do with the order. Regardless of how trustworthy the greeting message might sound, delay the shipping until you are 100% sure if the person behind the number is legit.

Next Day Or Priority Shipping

When someone tries to steal something online, time is of crucial importance. They need to get those goods dispatched as quickly as possible, ideally before the shop owner realizes the fraud.

That’s why you will see a lot of fraud among orders with next day shipping.

Why would this raise a red flag?

Next day or priority shipping is usually quite expensive and unless your product is really time sensitive, you won’t get that many requests for it. Therefore, every order with next day delivery should be flagged as potential fraud.

Expensive product

I guess a typical thieves logic is simple – if you want to steal something, it better be worth it. It is almost uncommon for small, cheap items to be stolen, therefore again, a surprisingly big order or an order for a very expensive item should be flagged for validation.


Similarly to next day shipping, it is quite uncommon for someone to order a very expensive item without first inquiring about it.

Buyers of expensive goods like to ring the shop first before they trust them with their money. Simply.

Payment by Credit Card

Fraudulent orders are paid by credit card. Always. Other forms of payment are (from my knowledge at least) safe.

Credit Card Fails Verification

I suppose this one doesn’t need an explanation. You try to validate a card and it fails. A clear sign of an online order fraud attempt. Red flag.

What Happens If You Ship a Fraudulent Order

This is a question I get asked a lot. What happens if you fail to spot a fraudulent order and ship the goods?

In a case of a drop shipping business, you might be on a lucky side. You might still have a chance to stop the order if you act quickly. Your product will not leave the producer or drop shipping company for at least few hours within placing an order giving you some time to put it on hold.

However, if you ship your products yourself, you might not be able to do much except trying to get your shipping company to return the order. However, you might still have to incur some charges.

If however, and this is unfortunately the most common situation, you don’t catch the fraud on time (because for instance, a credit card was stolen and by the time it gets reported, the goods have already been shipped), you might get stung quite heavily.

Here’s how it works.

When a persons stolen credit card is used to purchase goods in your store, the bank will refund the credit cards owner. You however will be stung for that amount.

In a case of an expensive item, say, something that cost $999, your breakdown of costs might be:

  • Cost of the goods (say, $450)
  • Shipping (say $39.99)

total: $489.99

That’s how much this fraudulent order will cost you.


With potential losses like that you really have to be vigilant. Online order fraud has become a serious problem for many Ecommerce retailers. There are many unscrupulous people online who will prey on your inexperience in dealing with fraud, holes in the buying process, or simply take their chance in order to take goods from you and have you pay for them.

Pawel Grabowski

Pawel Grabowski is a copywriter and content marketer and the founder of, the content marketing agency helping SaaS companies grow the user base and generate quality leads with targeted content strategies.

Find out more about Pawel at and connect with him on Linkedin.


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