Are Freight Forwarders Risky or Safe?

For even the most experienced eCommerce merchant, seeing orders with a “reshipper” or “freight forwarder” address can be nerve-wracking. Many merchants are wary to ship a package, often high value, to a warehouse or storefront. Is that warranted? And how can you tell the difference between a legitimate and fraudulent order to a reshipper?

In this blog post, we’re breaking down our most frequently asked questions about freight forwarders.

Q: What’s a freight forwarder?
A: A freight forwarder, or reshipper, is a business that receives packages and reships them to a secondary destination. Orders shipped to freight forwarders often contain a string of numbers and letters in the address field, which is typically the customer or parcel ID number. A freight forwarder will typically appear as storefront or warehouse on Google maps and is commonly located on a country’s borders (ex: Wilmington, Delaware or Portland, Oregon).

Q: Why are orders sent to freight forwarders considered high-risk?
A: Often, overseas fraudsters will first ship products to a freight forwarder, who will then ship them to the fraudster. Why? While shipping a package to Nigeria may raise some eyebrows, shipping a package to Doral, Florida is more likely to go unnoticed by a merchant’s fraud prevention defenses. This tactic also protects the fraudster’s identity, as they can receive an item without revealing their true location.

Q: Are orders sent to freight forwarders ever safe?
A: Yes. Often, safe customers will often use a freight forwarder if they want to purchase a product that does not ship directly to their country. Also, for the many international shoppers who want to purchase U.S. brands, it’s often less expensive to use a freight forwarder than to purchase the product in their home country.

Q: How do I distinguish between legitimate and fraudulent orders shipped to freight forwarders?
A: While you should be cautious about orders shipped to freight forwarders, denying all shipments to reshippers will hurt your bottom line—especially since the typical shopper that uses a reshipper has a higher-than-average cart value and is likely to be a loyal customer. The key to identifying legitimate orders vs. fraud is to look at other data points on the order for clues.
These key data points include:
         •  Use of a Proxy
         •  IP Location
         •  Country where the credit card was issued
         •  Email longevity
         •  Customer order history
         •  Reshipper history

When you pay attention to these data points, it’ll be easier to spot inconsistencies that point to fraud. For example, if a customer’s IP country, and credit card country match, there is a good chance the customer is legitimate. Orders with emails without longevity and the IP is a proxy would be considered a higher risk for fraud. 

Q: How can NoFraud help?
A: NoFraud’s AI-powered solution provides instant, automatic fraud decisions on all orders, including those going to a freight forwarder, allowing you to ship to those profitable international shoppers while keeping the fraudsters away. 

To learn more, reach out to Shoshanah at shoshanah@nofraud.com.