Types of customers and fraud:

With all new vendors, we must start from the ground up. From the moment our partnership begins, we attempt to assess what types of customers our vendors will be receiving. For the purpose of this study, we reviewed one of our new vendors and will now refer to them as “Supplier A“. In the case of Supplier A, several discrepancies were located in each order placed through their system. We noticed discrepancies between the billing information and the IP addresses, as well as discrepancies within our internal tools. While not unusual to find orders with these types of discrepancies, we did find that each new order placed had very similar discrepancies. This made it appear that the same person or group was attempting to circumvent the fraud review process and get by undetected. When we noticed such a large percent of Supplier A’s orders with these same discrepancies we then proceeded to take a higher level of caution with all new orders reviewed. It appeared that the trends changed slightly, receiving orders with matching billing addresses and IP addresses but suspicious email addresses as well as substantial and consistent discrepancies within our internal tools. This may have been the work of the same person or fraud ring placing the original orders, but it is also possible that the vendor was being hit by other fraudsters.

Fraud types and the likelihood of fraudulent activity:

Supplier A is providing a virtual private network or VPN service. A VPN service is both an intangible service and easily accessed long before the legitimate cardholder is likely to notice this fraudulent transaction, making this service a prime target for fraudsters. Knowing that this service is highly likely to attract fraudulent activity, we will be more prepared and inclined to contact the customers to provide a more in-depth review of the customer before reaching a conclusion.

Friendly fraud:

Unfortunately, everyone is at risk of friendly fraud. A VPN service, however, is less likely to receive this type of fraud than a vendor providing a product or service of a more personal nature such as dating or adult products. Friendly fraud is also the most difficult type of fraud to catch, as the correct information is generally listed on the order. The customer is more likely to report this as fraud if they do not recall the purchase or issuing a charge back instead of requesting a refund. Suppliers should keep records of the order, communicate with the customer, and save any other pertinent information to aid in disputing these charges when the time comes.

How can we minimize the risk to the vendor and the overall results?

The best advice that we can offer to any vendor is to be proactive with their own orders. Review any order, even briefly, to look for discrepancies listed on the vendor page or the information listed within their own system that we may not be able to access. If a vendor is suspicious of an order due to the discrepancies they find, or for any other reason, we encourage them to research it further. One of the most readily available tools around is the internet, and there are several helpful tools that are free for anyone to use. Google maps will help you know if the address listed is a home, business, or even an empty field thanks to the satellite images. The directions feature is also quite useful, letting you plot the distance between the billing address and the IP location. An IP location 500 miles away from the billing address tends to be a bit more suspicious than one within 50 miles. Another useful tool is whois domain tools this lets you check where an IP is coming from or search on an email domain to find out additional details. Is this an established business that has been around for years, or was the domain just created recently to appear legitimate? There are countless tools available to anyone if they wish to search for information about a customer. Our vendors are also more than welcome to contact us by emailing fraud@2co.com through our ticket system or by calling 877-294-0273 to express concern. We will take an additional look into the order with any new information provided. Once a vendor is aware of the types of fraud that they receive, they are more likely to understand and locate the types of fraud that they may be getting.

The world of fraud is ever changing and while we would like to say that we can prevent every instance of fraud, this is unfortunately not the case. Only by working together will we be able to provide the most effective protection.

Mike and JR – Fraud Department

All types of e-commerce companies have dealt with friendly fraud at one time or another. Within the past few years there has been an increase in deliberate friendly fraud. There are a few factors that have contributed to the rise in deliberate friendly fraud; such as the shape of the economy worldwide, individual financial situations, and consumer’s knowledge of how to take advantage of the banking system. Unfortunately, the economy can impact a person’s financial stability which can cause this type of deliberate fraud. What someone can afford today, they may not be able to afford tomorrow. This can lead them to drastic measures to hold on to any funds they have.

Another type of friendly fraud are fraudsters that regularly manipulate the system to get their products for free. Since these fraudsters are constantly finding new ways to use the system to their advantage, there is no real way to avoid this type of friendly fraud from happening. Basically the only thing that can be done is to try to protect your business as much as possible.

Accidental friendly fraud is when the consumer mistakenly disputes a charge and doesn’t take the incentive to rectify the situation. In many cases it can be helpful to contact the customer directly to give them additional information about the charge and the product or service that was purchased. Accidental friendly fraud can be easily fixed. Once the consumer realizes they made the mistake, they remedy the situation. The following suggestion may help to avoid this type of friendly fraud. If your business uses a reseller, a payment processor, or any type of third party billing service; such as 2Checkout.com, PayPal, Clickbank, WorldPay, or Google; it is very important that your customers are aware of this. Placing this company’s information on your website and on your receipts will help customers recognize the charge on their billing statement. An additional feature available to 2Checkout.com suppliers is the use of a “soft descriptor”. Each supplier can enter their own “soft descriptor” to be included within the description sent to the credit card companies when a credit card is billed.

With all of this in mind, before you send a product or provide a service to a customer, make sure you know the customer. If you don’t know them or are skeptical, use the tools on the internet or any other tools made available to you in order to screen the customer. You may request that the customer fax information to you such as their photo ID or a utility bill. Additionally, you may contact the Fraud Department to request that 2Checkout.com require additional documentation from the customer before providing the item(s) ordered.

These preventative methods may lower the chance of receiving a fraud related chargeback. However, even with doing all of this, there is really no way to predict cases of friendly fraud. It is a good idea to prepare your business for these special cases. The best way to prepare is to keep all documentation about the customer, the product/service that was provided, and any contact you have had with the customer; as these may be needed to challenge a chargeback. Some examples of documentation you should retain are:

• Proof of Successful Download
• Proof of Product Usage (Login, IP, etc.)
• Signed Terms Of Service/Contract
• Signed Proof of Delivery/Delivery Confirmation
• Tracking Pictures of Shipped Products
• Detailed Description of Product

Since there is no real way to stop this type of fraud from happening, a good business practice is allocating funds to offset any possible losses due to all types of friendly fraud. This can help ensure your business continues to grow while you are trying to recoup the loss of funds from the chargeback. All online companies spend time and money looking for fraud, but fewer companies spend enough time gathering the information required to fight friendly fraud. As this is “Fraud Awareness Week” we decided to take this opportunity to remind you that friendly fraud is out there and can negatively impact your business. With all of this information, you can be better prepared to fight friendly fraud.

Amanda and Leona – Disputes Department

A recent article found in Internet Retailer revealed that 85% of consumers plan to shop online this holiday season.  Sixty-nine percent plan to make holiday purchases online.  The survey goes on to say that 57% of shoppers are planning to use the Internet to “compare different retailers to find the best price.”

This comes as no surprise during a time of economic upheaval.  But is your ecommerce site ready to convert these shoppers?  What if you offer the same price as many other retailers?  Or even a higher price?  Are dollar signs the only card consumers are willing to play this holiday season?  No.

During an economic challenge, the focus isn’t necessarily just on price alone.  What shoppers want is value.  Sure, it’s an old-school term, but it still holds just as true today as it did in the ‘70s and even the ‘30s.

What customers are really searching for is the most for their money.

How do you prove to them that your site offers greater value than the millions of others they’ll encounter?  Through your copy.

You’ve got only a few weeks left before the frenzy of online shopping breaks loose.  Use this time to take one last fresh look at your site copy.  Does it:

1.  Clearly differentiate you from your competition on every page? If I were to happen upon your site during my holiday surfing, could I – in 10 seconds or less – determine that you are a better option than the eight other sites I’ve just seen?  If not, insert some copy that lets me know why I should buy from you and not them.

Some call this a unique value proposition (UVP) or a unique selling position (USP).  I call it good sense.  If you don’t already know how you’re different or better than the competition, it’s time to do some high-speed brainstorming.  If you do understand your differentiating factors, don’t keep them a secret.  Make them known to your site visitors.

Maybe you offer free shipping. Or free returns.  Do you provide samples or swatches?  Perhaps you have a rewards program similar to frequent flyer miles. It could be that you really do offer the lowest prices.  Whatever your “hook” is, you’ll want to communicate that through your copy on the Home page, Category pages and Product pages.  Continue through until the buyer hits the checkout process to ensure she doesn’t forget why you’re the best choice.

2.  Hang a welcome sign on all your doors? I just returned from SMX East in New York where I spoke to a session full of ecommerce site owners about this very topic.  I’ll fill you in on the gist of my presentation and save you the $1,600 admission fee.

Econsultancy.com recently conducted research of over 60 ecommerce sites and found that the Category pages were the ones that lacked the most.  I’ve found the same in my professional experience.  We tend to pay the most attention to Home pages and individual Product pages. However, over 60% of visitors come into your site through other pages.  Make sure you’ve got them all covered.

While 60% of people who land on Product pages leave immediately, according to the study, only half that many (about 33%) leave Category pages once they arrive.  There’s a natural affinity between Category pages, consumers and also the search engines.

If a visitor landed on one of your Category pages, would he get enough information to make him stay and shop?  Or would he be part of the 1/3 that clicks away?   Make sure you provide easily viewable images, not small photos.  You’ll also want your Category pages well branded, including copy that explains your UVP.  Lastly, don’t skimp on descriptive copy at the top of your Category pages and/or beside or underneath images.

RosettaStone.com, OmahaSteaks.com and Walmart.com give some creative examples of incorporating these elements.

3. Use canned copy? There’s no doubt, there are numerous benefits to using manufacturer-provided copy on your site.  It’s well written; it’s free, and it’s easy to insert into your site.  But it does absolutely nothing to set you apart from the crowd.  As a matter of fact, just the opposite is true: it only serves to make your site blend into the masses of other resellers online.

Consider your customers’ experience.  Suppose they search for a particular stuffed Teddy bear that you – and millions of other sites – sell.  The shopper goes to the first site and reads the copy.  She looks at the images and makes note of anything the site offers that she could take advantage of (discounts, free shipping, etc.).

She moves on to the next site.  Same exact copy.  In fact, same exact pictures.  Hmm… nothing new here.  She clicks away to the third site and on it goes.  It won’t take long before she’s seen enough and decides to buy at the next site she visits because they all seem to be exactly the same.

Take the extra time and effort to use unique copy instead of the same, tedious text others are using.

When you give financially strapped shoppers a solid reason to purchase from your site, you do them a huge favor.  You cut their shopping time down, and you enlighten them as to how you can provide better value for their money.  While it takes a little more work, it also pays off with much higher returns.

Karon Thackston is President of Marketing Words, a copywriting agency specializing in SEO copywriting. For additional information about copywriting services, visit www.MarketingWords.com.

Requirement 3: Protect stored cardholder data
Requirement 4: Encrypt transmission of cardholder data across open, public networks

We have provided a secure network to collect and store our customer’s information. Now, we need to turn our attention to the data itself. To fulfill requirement 3, we need to come up with a policy detailing how we will store card holder data. This sounds easy enough, just make a few decisions and stick with them. However, this is actually a bit more complicated as the PCI-DSS FAQ explains. There are 20 different criteria to meet. While I suggest reading the linked FAQ some highlights are:

• 3.1 Keep cardholder data storage to a minimum.
• 3.2 Do not store sensitive authentication data after authorization (even if encrypted).
• 3.2.3 Do not store the personal identification number (PIN) or the encrypted PIN block.
• 3.3 Mask PAN (Personal Account Number) when displayed (the first six and last four digits are the maximum number of digits to be displayed).

I have to admit, after reading what is involved with this portion of PCI compliance, I nearly gave up. This part of PCI compliance doesn’t really have a cost that can easily be measured in money. The cost is in time – hours and hours of time spent looking over what information is stored, where it is stored, how long it should be stored, what systems are used to backup that data, etc. it gets exhausting.

As you become familiar with the standard, you will need to figure out what data you must keep on hand and how long would be a reasonable amount of time to keep that data. The longer you keep the data, the more risky and potentially costly it becomes in the unfortunate event the data becomes compromised. Generally, to comply with requirement 3, you need to understand that all information you collect from your customers must be protected. This means that you can only store a limited amount of the data, and the data you do store must be encrypted (see below).  A simple overview of the requirements for card data storage encryption can be found here.

Requirement 4 is a little more straightforward. While most people recognize the need to encrypt sensitive information during transmission over networks that are easily accessed by malicious individuals, few recognize the importance of encrypting information sent between back-end systems. This also means that stored information needs to also be encrypted.

Encryption is the most effective way to achieve data security by translating data into a secret code. Essentially, both stored and transmitted data must be made unreadable. The most common method used by credit card processors to protect high speed transactions is a network security protocol called Secure Socket Layer(SSL).

To get an SSL certificate you will first need to choose a certificate that matches your specific needs. Then you need to generate a Certificate Signing Request (CSR) for the site. For example, I found a site selling a certificate for a single domain for $600.00/year. This is on the low end for SSL pricing considering that it comes with a warranty, re-issuance, and provides features I like (priority phone support and regular security audits). I should also note this is a 2Checkout supplier.

If someone were to access our network from the previous article, we want to have protections in place that both limit their access to our customer’s information and makes any information they may access unreadable. Complying with the second set of requirements provides another layer of security for our customers.

Bottom Line for Step 2

Time:
Hours and hours – Literally HOURS and HOURS

Cost:
SSL Certificate: $250-$700+/ year

One aspect of 2Checkout’s fraud prevention that we’ve mentioned – but not discussed in depth, is our ability to tailor our fraud protections to suit your individual needs. While our normal fraud procedures provide sufficient protection for the majority of our vendors, from time to time a more tailored approach is helpful. Do you ever feel that we are flagging too many valid orders as fraud? Do you ever feel that your product attracts more fraudulent consumers than you expected? We are happy to work with you and offer suggestions to help reduce fraud and allow good sales.

These strategies may be as simple as changing how we review orders for your product or service. It may also be suggesting simple wording changes in your product explanations on your website. We have been doing fraud prevention for nearly 10 years; let us work with you and show you how effective we are.

Years ago, as a financial advisor (CLU, ChFC) I learned firsthand that most people spend more time planning how they’ll spend a one week vacation than how they’ll spend their retirement years.  I don’t think that’s changed all that much despite the recent market fluctuations.

In marketing a small business or professional practice, it’s not much different. People don’t prepare for marketing as much as they “just do it”. Now, Nike’s tagline notwithstanding, that’s just foolish. And no different than focusing more time on planning your one week vacation than your retirement years.

Seth Godin made a great post on this very topic.  He argues that business people are like “kids in a candy store” gazing at all the “goodies” — the myriad choices of marketing tactics that are readily available to us all…Twitter, Facebook, blogs, etc.

Seth’s not saying there’s anything wrong with these marketing options (there isn’t).  But, he admonishes us all to remember that they’re marketing tactics, not a marketing strategy. Tactics are supposed to support your marketing strategy, and if your strategy isn’t already in place…then using any marketing tactic is akin to launching a rocket but forgetting to add the astronauts before lift-off!

You’d scream if NASA did that, but in your own business…you may be doing precisely that if you haven’t chosen your marketing strategy before your marketing tactics.

Point:
It’s not the ‘quick and dirty’ approach to marketing (which is appealing, I will admit!)…but defining and articulating a viable marketing STRATEGY before you begin to consider which TACTICS you’ll use to implement and communicate your strategy is going to set you apart from your competitors and…far more successfully, too.

Bill Doerr is an authorized Duct Tape Marketing Coach. You can visit his web site at sellmoremarketing.com

With over 85% of small businesses failing in the first three years of operation, one has to wonder why this number is so high.  So I did a little research and this is what I found.  It turns out that banks, business schools and different organizations that support small business were asking themselves the same thing.  With a passion (not unlike mine) to see small businesses succeed, they decided to find an answer.  They decided to survey small businesses and find out what the heck was going on.  Funny thing, all of them found the same revealing yet simple answer to the question.  Why are so many small businesses failing – simply put, “it is a lack of marketing”.

Even after discovering this, I was still perplexed as to why someone would put so much “blood, sweat, and tears” into creating something that they love just to see it disappear before their eyes.  But then I realized that we all start businesses (and I’m no exception) because we want to work for ourselves doing something that we love.  So we start our own (marketing, retail, literacy, training) business with all the right intentions to make it successful.  But then we get so involved in working in the business that we forget or don’t know how to work on the business.

So how do you break the cycle of working in your business instead of on it?  Simple, you have a plan:

1. Schedule time with yourself each day or each week to work on your marketing (do not break these appointments; they are as important as any appointment you would make with a client)
2. Decide in advance what you want to accomplish this year with your marketing (this will eliminate the “promotional panic” where you spend money on last minute ideas and get no results)
3. Commit to a budget to support your efforts (decide on a number that you can spend monthly; you can’t grow on zero dollars)
4. Identify your ideal client (it’s easier, cheaper and more effective to market to a specific group of people that wants your service than to market to the masses)
5. Define your differentiation and communicate it (you have to stand out from the crowd/competition if you don’t want to be shopped solely on price)
6. Create a communication system that allows you frequent and regular contact with your prospects and clients (it takes 7 – 10 touches for someone to know, like and trust you and then buy from you)
7. Stop talking about you in your marketing materials and start talking to your ideal client (people want to know what’s in it for them; tell them about the benefits; not the features)

John Jantsch said it best in his Duct Tape Marketing book, “If you’re in business, you’re in the business of marketing”.

Brenda Mahoney is a Duct Tape Marketing Coach located in Calgary, Alberta Canada. Find out more at www.criticaledgemarketing.com

Word of Mouth Marketing, the oldest form of marketing is gaining ground again. How can business owners beat the current recession with Word of Mouth Marketing?

Educate and Nurture Your Current Customers

Don’t put all emphasis on new customer acquisition, but affirm your current customers,
find ways to develop loyalty programs that increase the lifetime value of your customers. Reward
clients with your time, attention and little extras – they will become enthusiastic promoters for your products and services.

Get Known as an Expert in a Niche Community

Are you creating compelling stories (ideas, articles, informative presentations or videos) that are picked up and shared person-to-person via social networking sites or within niche communities? If not, observe successful entrepreneurs in your niche and find out how they have become experts and what has contributed to their success. Participate in discussions, create conversations and relationships that help you become an expert and share your ideas.

Offer Pleasant Surprises to Create Viral Marketing

Surprising your clients is worth your time, since it gives you an opportunity to exceed their expectations and satisfied customers will be back. It is not hard to come up with a special offer or free complimentary service, you can always add something remarkable to your product. The level of expectations changes fast these days, you have to be creative and continuously find new ways to “over deliver” so that your customers keep having new reasons to talk about you. Get to know your customers, their habits and buying patterns, develop a system to pleasantly surprise them.

Become and Stay Referable

Never stop learning how to be better and more efficient at what you do. Give your customers every reason to drum up more business for you and find out why or why not people refer you. Always welcome opportunities to meet and help other small business owners. Be interested in their business and volunteer activities. You will learn from them, also share your expertise and they will refer you as they get to know, like and trust you. You and your business will be on their mind as people in their network need products or services that you offer. Find time in your busy day to send thank you cards and notes to people who have made a difference in your life. Make it effortless for your loyal clients to provide information about you, your products and services (make sure they have your business cards and promotional materials, etc.) If you become and stay referable, you don’t have to try to sell your business to others, it will come to you.

Varju Luceno is a Duct Tape Marketing Coach in Missoula, Montana. You can visit her website at www.globalofficepartners.com.

Advertising is a key component of the lead generation. It is typically the most expensive tactic,  so it is important to create effective ads.

Browsing through a local business magazine, I noticed four common advertising mistakes:

Lack of an attention grabbing or confusing headline

While most of the ads had headlines, several headlines did little to communicate the benefit the company provides to their customers. Some were confusing when viewed in context of the overall ad. Two ads in particular made me think they were for health care companies, but after reading carefully, they turned out to be for construction companies.

Here is a headline from a construction company that does clearly communicate who they work with – “Let us show you how we make healthcare construction easier for your customers.”

The ad copy is “me” centric rather than customer centric

Advertisements tend to focus on the capabilities of the company – “We Know…”, We are “The Ultimate”, We’ve been around for 20, 30, 40 years, etc.

To get better results from your advertising, focus on the types of customers you help and the problems you solve for them.

The Business Bank of St Louis has an effective ad that quotes one of their customers explaining the issues he was facing and how switching to this particular bank solved those problems for him.

No call to action

Most ads lacked a call to action. This was particularly noticeable on the ads with great headlines. One in particular was for a commercial real estate company. They had a great headline “We Deliver Certainty Of Outcome”. However, there was no call to action or education about how they do that or who they do it for.

Once you grab a prospects’ attention, keep building on that momentum. The ad for the bank I mentioned above, did a great job of focusing on the customer, but failed to provide a call to action to encourage business owners to continue to learn to know, like, and trust them.

Jumping right to the sale

Rather than trying to make a sale from your limited ad space, give your prospects a low risk way to continue to go down the path of Know, Like, and Trust by inviting them to learn more about you and the problems you solve.

Avoid these common mistakes and create ads that attract more of your ideal customers.

Bill Brelsford is an authorized Duct Tape Marketing Coach. You can visit his web site at www.rebarbusinessbuilders.com

The offer, which was recently extended through September, will expire Thursday, October 1, 2009 at 12:00 a.m. EST. South African businesses anxious to integrate a new e-commerce solution and try our system on for size, are encouraged to signup as soon as possible and enjoy the $49 USD savings.

Detailed information highlighting 2Checkout’s international advantages, as well as a link to the free signup offer for South African-based businesses is still available.

In related news, 2CO will soon be announcing the integration of five additional international currencies to its purchase routine, including the South African Rand. Stay tuned for more details.