We recently got hit by a series of fraudulent orders which we didn’t catch. It wasn’t fun at all – our lost probably ends up in the $500 range when you add it all together. Not fun, just a part of business though.
Fraud is a part of business. One strange aspect of being online is that while we get to ‘dodge’ the penny-ante issues like shoplifting and bogus returns; we open up ourselves to some much bigger frauds. Specifically, intentional credit card rings. The process is simple – a credit card number is stolen and then passed on. In many cases, it’s a whole organisation in-play, where credit cards are distributed among a number of individuals. Orders are placed online to multiple sites as fast as possible. Once a site is known to accept these cards, they are often ‘hit’ multiple times.
Addresses are given to either a remailing location or sometimes, unknowingly, a series of ‘dupes’ are used. These individuals receive the products and remail them to another location(s), often completely in the dark that they are part of an illegal operation. Once these products arrive at the new location, these products are resold – either through Craigslist, at pawn shops or the like.
Popularity & Safety
Most of the time, in the gaming industry, fraud has been a minor problem. The few times we’ve seen it, it is often a one-off incident (most likely a close friend or relative stealing a card for illegal / unauthorised use). This is / was due to the lack of popularity of our products. The resale value of our items was low as was the demand – especially when compared to other industries like electronics or mobile phones.
Unfortunately, that veil of safety has now lifted it seems. The growth in the industry, from Will Wheaton’s Tabletop to board games in Target & Wal-Mart have made our niche products no longer niche. We’re in the big leagues now. So yay?