Signs of Fraud in Shipping Addresses
For merchants who ship physical goods, the shipping address provided by the buyer can be a rich source of information.
What's the Relationship Between the Billing and Shipping Addresses?
The simplest comparison you can make between two addresses is to see whether they’re identical. Orders shipping to an address other than the billing address are generally more likely to be fraud. With some additional work, it’s possible to calculate the distance between two postal codes, if you can find the latitude and longitude of both postal codes. This information is publicly available for United States zip codes, and may be available for other jurisdictions as well. In addition, calculating this distance is a service many fraud solution providers offer. You may find that orders shipping within a few miles of the billing address are relatively safe compared to orders shipping hundreds of miles away.
Digging deeper, you may be able to discover through manual research or through automated address lookup services that the people living at the billing address and the shipping address are related in some way. For example, an order for a laptop shipping from New York to Missouri is less likely to be fraud if both addresses are single-family residences and the families living in each have the last name Hawkins. Chances are better than not that the order is a gift for a family member.
What's the Nature of the Shipping Address?
Knowing what building is actually at the shipping address can be very valuable.
For example, freight forwarders are a potential sign of bad behavior. These companies receive shipments and then consolidate them to be shipped via freight overseas. There are many customers who use these services legitimately to get goods sent overseas affordably, but there are also many fraudsters who are operating in other countries and use freight forwarding to avoid recruiting local reshippers. One way to tell an address may belong to a freight forwarder at a glance is a container label in the address, looking like 123 Dock Road Suite 100 #KXQ-582899328. Additionally, lists of registered freight forwarders are available publicly and may be included as part of the underlying services provided by fraud detection vendors.
In addition, behavior at the shipping address can be indicative of fraud. One way to see this within the scope of your business is by looking at velocity of orders going to that address.