For merchants who ship physical goods, the shipping address provided by the buyer can be a rich source of information.
What's the Relationship Between the Billing and Shipping Addresses?
The simplest comparison you can make between two addresses is to see whether they’re identical. Orders shipping to an address other than the billing address generally invite more suspicion that they’re fraudulent. With some additional work, it’s possible to calculate the distance between two postal codes, which is often done with an online mapping tool of your choice. In addition, calculating this distance is a service many fraud solution providers offer. You may find that orders shipping within a few miles of the billing address are relatively safe compared to orders shipping hundreds of miles away.
Digging deeper, you may be able to discover through manual research or automated address lookup services that the people living at the billing address and the shipping address are related in some way. For example, an order for a laptop shipping from New York to Missouri is less likely to be fraud if both addresses are single-family residences and the families living in each have a shared surname. Chances are better than not that the order is a gift for a family member.
What's the Nature of the Shipping Address?
Knowing what building is actually at the shipping address can be valuable.
For example, freight forwarders or drop shippers are a potential sign of bad behavior. These companies receive shipments and then consolidate them to be shipped via freight overseas. There are many customers who use these services legitimately to get goods sent overseas affordably, but there are also many fraudsters who are operating in other countries and use freight forwarding to avoid recruiting local reshippers. One way to tell an address may belong to a freight forwarder at a glance is a container label in the address, looking like 123 Dock Road Suite 100 #KXQ-582899328. Inputting this address into a search engine is a quick way to find the website of the business, confirming the presence of a freight forwarder.
In addition, behavior at the shipping address can be indicative of fraud. One way to see this within the scope of your business is by looking at the velocity of orders going to that address. Unless there’s a reason for this, like a large apartment building or a corporate headquarters, you may have identified an address being utilized by fraudsters.
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