Thursday, November 23, 2006

Beware of Increased Fraud During Holidays

The holidays are here and they bring with them some good and bad for online booksellers. The good part is that the holidays normally bring an increase in sales volume, the bad part is an increase in fraud activity.

For most online booksellers that accept orders only through the major marketplaces, e.g., Amazon.com, Alibris.com, Abebooks.com, Half.com, BarnesandNoble.com, etc., there is not too much to worry about with respect to credit card fraud, but you should still take some precautions, particularly for those expensive books ordered by overseas customers.

A frequent scam involves the purchasing of expensive books (e.g., law books, medical books, and specialized engineering books) using a stolen credit card. The card is initially accepted, but once the book has been shipped, problems arise.

If you ship internationally and sell valuable books, keep a record of the Customs form number (it is printed on your Post Office receipt) since no other tracking method is really viable for international orders. You could pay for registered or certified deliveries, and they will certainly confirm delivery, but the Customs form will do the same.

Typically, you will be covered by the marketplace that accepts the credit card, but it is wise to keep the record in case there is any dispute.

A mistake that many new online booksellers make is responding to the offers of buyers asking to purchase from you through an off-site payment service like PayPal. If you do this, you risk having your marketplace account suspended for circumventing the marketplace, and if the off-site purchase indicates the sale is not covered by seller protection, you risk losing the book, the shipping fees, and a credit card chargeback fee if the card turns out to be stolen.

I am not suggesting that you not accept international orders during the holiday season, I only want to make sure you are aware of possible fraud. In five years of online bookselling, I have not been stung by a fraudulent international order, and I don’t want you to be either.

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