{"id":2229,"date":"2020-02-21T13:50:54","date_gmt":"2020-02-21T08:20:54","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=2229"},"modified":"2020-06-03T12:51:30","modified_gmt":"2020-06-03T07:21:30","slug":"heres-why-blacklisting-customers-is-bad-for-your-e-commerce-business","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/heres-why-blacklisting-customers-is-bad-for-your-e-commerce-business\/","title":{"rendered":"Here\u2019s Why Blacklisting Customers Is Bad for Your E-Commerce Business"},"content":{"rendered":"

Running an e-commerce business is no easy task. Every merchant is faced with many critical issues that can put an end to the business, if not handled correctly. We\u2019re here to brief you about a few important knacks while handling fraud. Let\u2019s begin!<\/span><\/p>\n

Let\u2019s consider the case of a merchant who runs a clothing subscription brand. The merchant has to monitor every detail in order to <\/span>deliver the perfect product<\/span><\/a> to the customer.\u00a0<\/span><\/p>\n

In this process, there are many things that the merchant tries to handle internally. When he is faced with a <\/span>high amount of RTO<\/span><\/a> or cancelled orders, he attempts to cover many details to foil it as soon as possible. One such detail is <\/span>handling fraud<\/span><\/a> and blacklisting customers who try to defraud the merchant.\u00a0<\/span><\/p>\n

When the retailer notices a myriad of patterns in a certain geographical area or limited to several accounts, he immediately attempts to curb it by blocking multiple users he thinks are suspicious.\u00a0\u00a0<\/span><\/p>\n

However, what he fails to realise is that this blanket blacklisting can cost him more than he thinks. Allow us to explain how so.<\/span><\/p>\n

What is blanket blacklisting?<\/span><\/h2>\n

Blanket blacklisting is the act of collectively blocking out a segment of your customers in suspicion of fraud. Blanket blacklisting is generally performed by e-commerce merchants who employ internal blacklisting after observing a pattern.<\/span><\/p>\n

Some of the online retailers even resort to using shared blacklists (shared between several merchants), while others mostly rely on industry-specific blacklists.<\/span><\/p>\n

On the other hand, <\/span>fraud prevention tools<\/span><\/a> employ a more complex version of blacklisting based on various parameters. This is usually fool-proof and quite effective as these tools employ a large number of high-efficiency parameters to accurately point to one or a group of fraudsters attempting to con your business.<\/span><\/p>\n

What are the attributes used for blanket blacklisting?<\/span><\/h2>\n

The number of parameters you use to determine a fraudulent user is directly proportional to the accuracy. Therefore, with a higher number of parameters, you can expect a higher accuracy of fraud profile.\u00a0<\/span><\/p>\n

Historically, though, there are three major parameters used to blacklist fraudsters on e-commerce platforms. We will be looking at how these parameters are commonly used and how that could be risky for your business.<\/span><\/p>\n

IP Address<\/span><\/h3>\n

How it\u2019s used:\u00a0<\/b><\/p>\n

The IP address is one of the most popular ways used to block scammers. The IP address provides vital information such as network details, device location, last activity, etc. While IP addresses were once a reliable way of identification, with the advent of technology, that\u2019s not the case anymore.\u00a0<\/span><\/p>\n

The risk:\u00a0<\/b><\/p>\n