How E-commerce Sites Can Stop
Fraudulent Orders and Chargebacks

For an e-commerce store, a chargeback is worse than a lost sale. You lose the inventory, you lose the money, and you pay a $15+ penalty fee.

Red Flags for Fraudulent Orders

• Shipping != Billing: Shipping to a different country than the billing address.
• High Velocity: Multiple orders in minutes from different cards.
• The "Proxy" Signal: The customer is hiding their true location.

Why Fraudsters Use Proxies

A fraudster in Country A using a stolen card from Country B needs to look like they are in Country B. They use a proxy to spoof their location.

If you see a customer purchasing HIGH VALUE items (electronics, jewelry) using a DataCenter IP or Tor Exit Node, investigate immediately. Real shoppers don't use Tor.

Prevention Workflow

1. User clicks purchase.
2. Server queries IPASIS API.
3. If is_proxy === true OR is_tor === true:
   • Flag order for manual review.
   • Or require 3D Secure (2FA) verification.
4. If Clean: Process strictly.

FAQs