When Your Customers Steal
“When Your Customers Steal” You know it’s a slow news day when
the news programs on TV turn their attention to their favorite
new consumer warning “Beware of online businesses!” they cry.
“YOU could be SCAMMED on the Internet!” Every time I see one of
these news stories, I groan, and wonder how many sales my sites
just lost. Then there are the ads for that new credit card that
“protects” consumers against online fraud. They make Internet
businesses people look like a bunch of thugs who meet in a sewer
all day long to torture innocent consumers. There a lot more
honest, hardworking Netrepreneurs out there than scam artists.
That doesn’t make for a good news story, though, so we all take
the lumps for the transgressions of a sordid few. You know what
I’ve never seen, though? I’ve never seen a headline story about
the CUSTOMERS who scam the Netrepreneurs. I’ve seen stories
about thieves robbing convenience stores. I’ve seen exposes
featuring the practices favored by professional shoplifters.
What about the “consumers” who target online businesses when
they steal? My partners and I market both informational products
and brand name merchandise on the Internet. And we’ve been taken
on both sides of the fence. We publish a B2B (business to
business) product called The Drop Ship Source Directory.
Recently, I received an email from someone who bought our
Directory on EBay, and had questions about how they were to
receive the information updates we send our customers every
month. There was only one problem. We don’t SELL our Directory
on EBay. I was forced to write back to that person and tell him
that he had been scammed. It was obvious to me that someone had
purchased our product from us, and was reselling it to others
illegally. How this scam artist expected to get away with
reselling the product, I’ll never know. At that time, it was a
download that contained nearly a thousand pages. (Now, it’s a
much larger online database). There is a copyright notice on
EVERY SINGLE PAGE. It’s like me buying Stephen King’s latest
book on Amazon, typing it up into electronic form, and then
reselling it on EBay. I’d have to be nuts to try something like
that! Last year, a site I was working with received an order for
some moderately expensive jewelry. Nothing out of the ordinary.
The credit card processed just fine, with the AVS (Automatic
Verification System) coming back “green”. This means that the
online processing system had checked the card’s information
against the on-file address and zip code of its owner, and
everything was OK. The Ship-to address was different from the
card owner’s Bill-to address, but that’s nothing out of the
ordinary either. LOTS of people buy jewelry and have it sent as
a gift to another address. A while later, we received a
“chargeback” letter from the customer’s bank. A chargeback means
that the card owner has disputed the charge, and we have to show
cause why we should not refund the money. At about the same
time, we got a phone call from a police department in West
Virginia, asking about that same order. Turns out that a woman
in West Virginia had inadvertently left her credit card on a
checkout counter at a large department store. A clerk at that
store picked up the card, and used it to make several online
purchases. The clerk was having the purchases delivered to a
vacant house RIGHT NEXT DOOR to his own. This guy must have left
his brain cell in the ‘fridge that day. The above are both good
examples of how WE, as Netrepreneurs, get “scammed”. Maybe I’ve
been luckier than most, but it has not happened to me all that
many times. We caught the guy who was reselling our Directory on
EBay. What we did was this: The person who purchased the bootleg
Directory was naturally very upset. I told him that if I were
able to catch this person and confirm what had happened, I would
see to it that his purchase was made good, and he would receive
full access to our REAL Directory. He immediately sent me all
the information he had on the auctioneer. Sure enough, the
auctioneer was a customer of ours. I notified EBay’s fraud
department (SafeHarbor@EBay.com). I then contacted the
perpetrator and elaborated on the penalties of copyright
infringement. He pulled his auction listings immediately. We
came to an agreement for restitution that I was satisfied with.
I suggested to him that he refund the other people to whom he
had already sold bootlegs, before THEY came after him. The
police in West Virginia caught the store clerk. They set up
surveillance at the vacant house next door, and waited for more
of his online purchases to arrive. After the case was
prosecuted, we got the jewelry back. All we lost was a few
dollars in shipping charges. If you’re in business, you’re a
potential target. Protect yourself as best you can. Use an AVS
system when you accept credit cards. Confirm large-dollar
purchases before processing them. When people charge thousands
of dollars to buy large-ticket items from my sites, I always
contact that customer to verify the purchase. I caught two
stolen cards that way, BEFORE I got burned. Watch for multiple
purchases of the same item by the same person. They’ll end up
being re-sold out of the trunk of a car, and you’ll be stuck
paying the REAL card owner back. Be aware of protection programs
like EBay’s Safe Harbor. And if you think you’re being ripped
off, don’t just wait around to hear from someone about it.
Contact the bank that issued the card, and the police in the
area you think the perpetrator purchased from. They take credit
card fraud very seriously. Who knows? Maybe someday, someone
will write a news story about it. Chris Malta WorldWide Brands,
Inc. For more information, visit http://www.YouCanDropship.com
