Here's how AI is helping against shopping scams

Online shopping should be a breeze, but fraudsters are making things complicated.

Shopify reports that in 2023, the US suffered ecommerce losses amounting to $38 billion from online payment fraud.

They might pretend they never got that cool jacket you ordered, or claim they received something totally different. This can be frustrating for a buyer and a seller.

The good news is, there's a secret weapon in the fight against fraud: AI.

Here's how:

• Spotting the Sneaky Shoppers: AI can make a system that can analyze massive amounts of data, like a detective scouring the scene of a crime. It can identify suspicious patterns, like a bunch of orders coming from the same location or device – a red flag for potential fraud.

• Beyond Just Blocking: AI isn't all about stopping people in their tracks. It can also be used to improve customer service like spotting high-risk transactions. AI can flag them for human review, allowing for a more personalized approach to preventing fraud.

• A Smarter Inventory: Ever wonder why some products seem to constantly be out of stock? AI can analyze return data to see if there's a trend. Maybe a dress has a sizing issue, or perhaps customer tastes have changed. This helps businesses keep their inventory fresh and relevant.

Here's examples of companies doing these:

• Fire with Fire: Companies like Visa are using their own AI that analyzes transactions in real time and reviews up to 500 risk factors in 300 milliseconds.

• Sharing the Knowledge: Companies like Sift work together to share information about risky transactions. This way, if a scammer tries their tricks on one platform, they're less likely to succeed on another.

• Verifying You, the Real You: Ever had to jump through hoops to prove you're not a robot? AI-powered verification systems are getting smarter at distinguishing real users from fake accounts. This can involve things like facial recognition or voice verification.