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Fraud Prevention

COD fraud prevention encompasses strategies and tools to identify and block fake orders before they incur shipping costs.

8 min read•Part of Cash on Delivery
The Problem

COD fraud costs merchants millions annually through fake orders, prank orders, and customers who order with no intention to pay. These orders waste inventory, shipping costs, and operational resources.

The Solution

A multi-layered fraud prevention approach combining phone verification, address validation, order limits, and behavioral analysis can significantly reduce fraudulent orders.

Understanding COD Fraud

COD fraud takes many forms:

  • Fake Orders: Orders placed with invalid contact information
  • Prank Orders: Malicious orders from competitors or bad actors
  • No-Intent Orders: Customers who order but plan to refuse delivery
  • Address Fraud: Invalid or unreachable delivery addresses

    • Prevention Strategies

    #

    Verification Layers

  • Phone number OTP verification
  • Address validation against postal databases
  • Email confirmation (where applicable)

    • #

    Order Limits

  • Maximum order value for new customers
  • COD availability based on customer history
  • Geographic restrictions for high-risk areas

    • #

    Behavioral Analysis

  • Device fingerprinting
  • IP address analysis
  • Order pattern detection

    • ROI of Fraud Prevention

    For every $1 invested in COD fraud prevention, merchants typically save $5-10 in avoided RTO costs.

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    Implement Fraud Prevention Today

    Apex COD Form includes built-in fraud prevention features to help you reduce RTO rates and prevent fraud automatically.