Common Scams Online Merchants Need to Avoid in 2022

Common Scams Online Merchants Need to Avoid
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Even in 2022, there are plenty of people out there who are trying to catch out countless online retailers. The big problem here is that they can often be small independent eCommerce merchants rather than big retailers who can potentially afford the loss created by these scammers. Here are some of the most common scams online merchants should watch out for in 2022.

Identify Theft

Obviously, one of the most common scams that you might have to face as an online retailer is that of identity theft. At some point, someone has had their identity and credit card information stolen, and the thief has either sold on this information or is using it themselves to buy a few choice items online.

This needs to be avoided at all costs. You also need to ensure that the information of any customer registered with you is well-protected. They will be relying on you to protect their personal and financial information, so you need to avoid the possibility that someone might gain access to their account and begin to spend without their permission.

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There are two ways to avoid this. To avoid hackers targeting the information stored on your server, you need to make sure that you have robust encryption and security protocols in place.

Hackers tend to target smaller eCommerce businesses with the mindset that they have weaker security, so you need to make sure that you don’t give them the opportunity that they need. You also need to make sure that you have stringent KYC checks in place so that you have the potential to catch a fraudulent payment before it can go through.

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Chargeback Fraud

One type of fraud we have seen a lot with the rise of eCommerce is that of chargeback fraud. It can take multiple forms, from someone feeling guilty about a purchase to an exploit of the system. However, if you have any policy that accepts refunds or chargebacks, you need to be aware of this type of fraud and how you can combat it.

A genuine refund should always be issued, but you need to be careful to ensure that the person receiving them is being genuine. If there is a genuine issue on your part, you can expect a lot of refunds due to a cancelled service or a faulty product.

However, if you are targeted by chargeback fraudsters, you will still have to give out a lot of refunds, and you might be even further out of pocket. You also need to watch that you don’t fall out with your payment partner too – they might start to charge you for the extra processing and create a negative relationship between the pair of you.

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Prevention is key here. Make sure that you have a strong refund system in place and ensure that all of your staff is well-trained in it. Be prepared to potentially offer store credit rather than a cash refund – this might deter fraudsters who would rather see the cash.


This is a subsection of chargeback fraud, but it is slightly different so we thought that it was worth a separate section. Traditional chargeback fraud is trying to get money back for an unused item or service with the goal of getting the money, whereas wardrobing is slightly different.

This is the practice of getting a product, using it, and then attempting to return it whilst claiming that it hasn’t actually been used. It is most common in the fashion industry. Got a big event coming up? You can just buy a dress, keep the tags on it, and then return it the next day, surely? Actually no – this is not the case and it is a form of fraud.

Though it is most common with fashion, it can also be found in the electronics industry. People can buy a new camera for their holidays, or maybe even a TV to help them host a big sporting event. What they don’t realise is that they can’t return their goods in the original packaging.

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In this event, do not issue a full refund. Offer a partial one instead, since you are not going to be able to sell the item at full price without the original packaging intact, and again try to stick to offering store credit rather than a full refund.

Be Vigilant

As a small eCommerce merchant, you have not got some of the big protections that the larger corporations might have. This does leave you more vulnerable to attacks from fraudsters who do not care about your livelihood and only wish to make a quick buck for themselves.

You need to be able to spot fraudulent activity when it comes your way, and be able to act appropriately to halt the fraudster and potentially gather enough information to pass on to law enforcement.

Unfortunately, having to deal with fraud is a very real part of owning your own business. One would think that it would be easier when things are run entirely online, but that is not the case. No matter what, make sure that you keep your business safe.

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Paschal Okafor is NaijaTechGuide Team Lead. The article Common Scams Online Merchants Need to Avoid in 2022 was written by NaijaTechGuide Team. The article was last modified: January 27th, 2022
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