Tips for Managing Fraud Risk in High-Risk eCommerce

Fraud is a reality for all eCommerce businesses, but if you operate in a high-risk industry, it’s not just a risk. It’s an everyday challenge that demands constant attention.

Whether you’re selling supplements, digital goods, adult content, CBD, or subscription-based services, fraud risk tends to be higher due to industry-specific vulnerabilities. These businesses are more frequently targeted by fraudsters, suffer more chargebacks, and often face greater scrutiny from payment providers and banks.

Managing fraud in a high-risk eCommerce environment requires a strategic, layered approach. It's not just about blocking bad actors, it's about protecting customer trust, preserving approval rates, and staying compliant with ever-changing regulations.

Understand Your Risk Profile

Before you can reduce fraud, you need to understand where and why you’re vulnerable. Each high-risk vertical has its own pattern of threats. Some face high levels of friendly fraud, where legitimate customers dispute valid charges, while others attract organized fraud rings testing stolen cards.

Knowing your average order value, chargeback rate, and typical fraud triggers helps you assess what types of tools and processes are needed.

You also need to account for your business model. Recurring billing, one-click checkouts, and cross-border sales can all introduce new points of risk if not properly secured.

Monitor Chargebacks in Real Time

Chargebacks are one of the most visible signs of fraud, and one of the most damaging. Beyond lost revenue, excessive chargebacks can trigger rolling reserves, merchant account freezes, or termination from your payment provider altogether.

High-risk merchants should track chargebacks daily, not monthly. Early signals allow for proactive intervention, such as refunding customers before a chargeback is filed, flagging suspicious orders, or temporarily tightening fraud rules during spikes in activity.

Most importantly, treat chargebacks as a data source. Use them to refine your rules, block abusive IPs, and identify repeat offenders.

Invest in Layered Fraud Prevention Tools

No single fraud tool is enough in a high-risk environment. You need a layered strategy that includes pre-authorization checks, behavioral analytics, and post-transaction monitoring.

Tools like device fingerprinting, velocity checks, address verification (AVS), and 3D Secure authentication all serve different roles in identifying risk without killing conversions. The key is finding the right balance, tight enough to stop fraud, but not so strict that you reject good customers.

For high-risk businesses, dynamic fraud rules often outperform static ones. Being able to adapt logic in real time based on geography, traffic source, or past behavior is essential for staying one step ahead.

Use First-Party Data for Better Decisioning

The more control you have over your checkout and customer data, the better your fraud detection becomes. Many high-risk merchants rely too heavily on third-party systems that limit data visibility.

By capturing and analyzing first-party event data, such as checkout behavior, timing, and device identifiers, you can build more accurate fraud profiles and reduce false positives.

This is especially critical in environments where traditional fraud signals don’t apply. For example, if your product is digital and delivered instantly, there's no shipping verification to fall back on. In those cases, real-time behavioral data becomes your strongest asset.

Train Your Team and Customer Support

Fraud prevention isn’t just a technical problem, it’s an operational one. Your support team should be trained to recognize suspicious activity, handle disputes with empathy, and follow clear refund protocols.

Quick, human intervention can often prevent a chargeback from escalating. For example, a delayed shipment or miscommunication can be resolved with a refund or resend, rather than risking a payment dispute.

Teams that understand the cost of chargebacks, and how to de-escalate them, become a core part of your fraud defense.

Choose the Right Payment Partners

Not every payment processor is equipped to support high-risk merchants, and not every fraud tool is optimized for high-risk use cases. Choosing the right partners makes a difference.

Look for payment providers that understand your industry and offer tailored fraud mitigation features. Ensure they provide visibility into risk scores, give you control over rules, and have experience with your chargeback thresholds.

The wrong provider may penalize you for legitimate activity or offer little help when fraud actually strikes. In contrast, the right partner will treat you as a long-term client, not a liability.

How Lasso Helps High-Risk Merchants Manage Fraud Smarter

At Lasso, we understand the unique challenges high-risk eCommerce businesses face. Our platform gives you full control over your checkout and real-time access to first-party data that can inform smarter fraud decisions.

Lasso supports multi-PSP routing, so you’re never dependent on one provider. We also integrate with best-in-class fraud prevention tools that operate behind the scenes, dynamically adapting based on behavior, velocity, and geography.

Because Lasso is built for performance and compliance, our infrastructure ensures you stay protected without sacrificing conversions. You don’t need to choose between growth and security, we help you achieve both.

Final Thoughts

Fraud is inevitable in high-risk eCommerce, but it’s not unmanageable. With the right systems, data, and operational discipline, you can prevent fraud before it happens, respond quickly when it does, and protect your revenue long-term.

Managing fraud risk isn’t about locking down your checkout, it’s about optimizing it to filter out bad actors while welcoming legitimate buyers with a seamless experience. That balance is what separates thriving high-risk brands from those constantly stuck in damage control.

And with a checkout infrastructure like Lasso, that balance becomes your competitive edge.