How to Spot & Prevent Fraudulent Orders in Your Handmade Business

Protect Your Shop from Fraudsters with These Key Warning Signs and Prevention Tips

Seeing Suspicious Orders? Here’s What Handmade Sellers Need to Know

Online shopping is booming—but unfortunately, so is online fraud. As more shoppers turn to ecommerce, fraudsters have more opportunities to exploit unsuspecting businesses, including small handmade shops like yours.

And it’s getting worse.

In December I had over a dozen Fraud orders. I'm so over it.

Advancements in AI and machine learning have made it easier for scammers to carry out sophisticated fraud attacks, from fake identity verification to stolen credit cards and deepfake scams. Experts predict fraud losses will hit $107 billion by 2029—and small businesses are not immune.

So, how can handmade sellers protect their businesses from fraudsters?

Let’s break it down.

Warning Signs of Suspicious Orders

Not every unusual order is fraud—but some red flags should make you pause and investigate further.

🛑 Here are a few key warning signs:

🔹 Randomly Generated Email Addresses – If the email looks like gibberish (e.g., zxq1234kjd@gmail.com), it may be an automated bot or a fraudster trying to stay anonymous.

🔹 Billing & Shipping Zip Codes Don’t Match – This doesn’t always indicate fraud (someone could be sending a gift), but if other red flags are present, investigate further.

🔹 Unusual IP Addresses – Orders placed from foreign or suspicious locations that don’t match the customer’s usual location can be a sign of fraud.

🔹 Multiple Credit Cards Under the Same Account – If a customer keeps trying different cards for purchases, it might indicate stolen credit card testing.

Major Red Flags That Should Sound the Alarm

Some fraud attempts are more obvious than others. Here are the biggest red flags to watch for:

🔺 Unusual Purchase Frequency – If a customer suddenly starts ordering the same product in large quantities (e.g., 10 bottles of essential oil every day for a week), that’s suspicious.

🔺 A Surge in High-Value Orders – If someone is buying out your most expensive products in large volumes, double-check before fulfilling the order.

🔺 Multiple Small Orders – Fraudsters often test stolen credit cards by making several small purchases before attempting a big one.

🔺 Rush Shipping Requests on High-Ticket Items – Scammers love to push for fast shipping so they can receive stolen goods before the fraud is detected.

How to Protect Your Handmade Business from Fraud

Being proactive can save you from costly chargebacks and lost inventory. Here’s how to stay ahead of fraudsters:

✅ Monitor Orders in Real-Time – Look for suspicious patterns in your order data (e.g., repeated purchases, different billing/shipping info). Most ecommerce platforms let you flag potential fraud.

✅ Use Fraud Detection Tools – Shopify, Etsy, and most ecommerce platforms offer built-in fraud detection. Third-party apps like Signifyd, NoFraud, and ClearSale can provide extra security.

✅ Manually Verify Suspicious Orders – If an order looks fishy, email the customer and ask for verification. Most scammers won’t respond.

✅ Limit High-Risk Transactions – Consider requiring extra verification for high-value orders (e.g., requiring a phone number or ID verification for purchases over $500).

✅ Keep a Fraud Watchlist – If you’ve had fraudulent orders before, track IP addresses, emails, and billing details of past scammers to block them in the future.

✅ Set Up Payment Protection – Enable CVV (Card Verification Value) checks and address verification systems (AVS) to stop stolen card transactions.

✅ Trust Your Gut – If something feels off, don’t ignore it! It’s better to pause an order and verify the details than to lose money to fraud.

Stay Vigilant & Protect Your Handmade Shop

Fraud is on the rise, but staying alert can help you prevent losses. Watch for suspicious buying patterns, use fraud detection tools, and manually verify questionable orders.

💡 Your next step? Review your most recent orders and see if any match the red flags above. If they do, take action before fulfilling them!

Have you experienced online fraud in your handmade business? Share your experience in the comments so other sellers can learn from it.