How can I prevent fraud when shipping an order?

Here's how you can help prevent fraud when shipping an order:

Verify shipping address

Go online and verify the shipping address. Look for red flags such as shipment to a freight forwarder, shipping company, P.O. Box, hotel or a vacant property. Fraudsters often ship orders to addresses that can't be traced back to them.
  • Freight forwarder: Third party shipping service that reships merchandise to another location (typically abroad) for a fee. To see where your package is being sent to, simply enter the shipping address into a search engine. If the search results show the name of shipping company, be more cautious.
  • Shipping companies or P.O. boxes: Fraudsters like the anonymity that shipping companies and P.O. boxes provide. However, there are also a lot of legitimate reasons for using a shipping company or a P.O. box. You just need to be more cautious, since shipping to P.O. boxes and shipping companies are typically more risky than shipping to residential addresses.
  • Money mule: Fraudsters pay people (known as money mules) to have orders shipped to their address. The money mule receives the package, then reships it to the fraudster’s address. Be careful if you have a lot of orders from different customers that are shipped to the same address.
  • Vacant property: To identify vacant properties, enter the shipping address into a search engine. If the property is currently listed as for rent or for sale, it could be vacant.
Ship with online tracking
Use a shipping service that provides online tracking to help confirm the item was delivered. Standard shipping receipts only show that an item was shipped. Online tracking services prove the item was delivered.
  • If the total sale is for $750 or more, obtain signature confirmation to confirm your customer received their order – the nominal expense is well worth it.
  • Use your discretion when shipping internationally using First Class Mail International since this shipping service is not accepted under PayPal's Seller Protection Policy.
Order shipping insurance
Too many things can go wrong in transit. That's why it's important to purchase shipping insurance for items that are fragile or expensive. Shipping insurance serves two purposes:
  • Insures the item in the event it is lost or damaged.
  • Includes tracking and delivery information so the customer can see that the order is en route, and you will know when the package was delivered.
In case of a shipping problem, file an insurance claim with the shipping company.
  • You, your customer or the shipping company can report claims. Contact your shipping company for detailed instructions on how you should proceed with a claim.
  • Be aware of insurance exceptions.
    • Liability for loss or damage may be limited depending on the type of package, the declared value, and/or the shipping company. Talk to the shipping company to ensure proper coverage.
Delay shipping high-risk orders
  • Delay shipment for new orders that are expensive and in demand for 24 to 48 hours, especially when shipping internationally.
  • Use caution when shipping overnight. Fraudsters will often ask for overnight shipping so that they can resell expensive merchandise as quickly as possible.
Use your own shipping service
  • Do not use your customer's shipping company when mailing orders. Packages can be rerouted by the customer to other addresses after shipment, and won't be covered by Seller Protection.
Use care when choosing or acting as a drop shipper
  • Since you're responsible for delivering what the customer orders, it's critical to choose a reputable drop shipper to help avoid losses.
  • Be wary of drop-shipping companies located in high-risk countries.
  • If you're a drop shipper, have a vetting process in place for all suppliers. This should include inventory management and product guarantees (to ensure that items are in stock and you're delivering high-quality merchandise).
Issue returns quickly and let customers know when you are out of stock/inventory
If an item is out of stock, remove the listing or update it to reflect the out-of-stock status. Provide an estimated in-stock date or clearly indicate that customers who choose an out-of-stock product are placing an advance order.

Example: A new customer orders a $10,000 chandelier. Here is what you can do:
  • Search an online map to see who and where the order is being shipped. Is the order being shipped to an expensive home, motel or to a freight forwarder?
  • Use a search engine or social networking site to verify the name and shipping address. Does the name, shipping address and billing address match?