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Sharing Your Shipping Account Number? Beware of Shipping Fraud!

Jan 29, 2020 9:56:00 AM

It’s a common practice for big retailers to share their shipping account numbers in the course of operations. Here’s why that can be an expensive gesture, and how 71lbs can protect against the consequences.

Picture this: The Chief Merchandising Officer of a billion-dollar retailer has dispatched merchandisers all over the world to seek out new and engaging products for their customers. These merchandisers think they’ve found just the right things to add to the product line, but they need to be sure by finding out what head office and their stores think.

The merchandiser asks for samples to be sent back for review before committing to a purchase order. They leave the manufacturer their business card, which also contains details of the buyer’s shipping account. Seems like an efficient, professional exchange, doesn’t it?

Yet there’s a hidden danger that could cost the buyer dearly. Let’s take a closer look:

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The merchandisers never really know whom they’re handing that valuable shipping data over to. The rep in our example just surrendered the key to the company’s shipping account and opened that account to potentially abuse.

The dangers of shipping fraud

Your shipping account is equivalent to your bank account, and yet there’s a huge decrease in security for the latter. Walk into a FedEx or UPS Store and very few, if any, questions are asked about the account number your package is about to be shipped on. This laxity is what leaves businesses wide open to shipping fraud.

Unless shippers guard and monitor their details closely, anyone could be using your account to ship their own packages to various destinations, leaving you to foot the bill. Too often, businesses don’t even check the charges and just pay blindly.

What are the big carriers doing to educate and protect businesses from shipping fraud? You can visit the UPS website to find five ways to keep an eye out for online shipping fraudsters as well as some general safety tips. FedEx offers privacy tips skewed toward online fraud protection (more on why that’s useful below).

Both carriers say they will work with customers to address actual or suspected shipping fraud — UPS provides details for this — but getting your money back may be a struggle, and UPS recently made headlines for missing fraudulent activity right under its nose. That article should be a warning to UPS customers since it cites law enforcement officials saying the carrier wasn’t proactive in working with them to prevent fraud.

We’ve written many times about how carriers make customers fight for any kind of refund. In our imaginary scenario where shipping account details were voluntarily given away, expecting carriers to pick up the slack may be too optimistic.

More shipping fraud dangers

At 71lbs, we’ve seen too many scenarios where shipping accounts are not monitored closely. For example, a disgruntled former employee of a Nebraska distributor — an employee with previous access to shipping accounts — used that privileged data to exploit the company’s shipping account to cover the expenses of her own intrastate move.

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It’s a well-known trick of the trade that the shipping account number is part of a UPS tracking number. Fraudsters have no qualms over using this to their advantage. Some businesses will also post their shipping account number online for use by employees or partners; another risky practice.

It only takes one hacker to grab that number and turn your account into a black-market distributor. The case of the Nebraska employee is mild. Someone with access to your shipping account could be distributing anything from counterfeit goods to drugs or worse. Imagine the price a business and its reputation could pay when law enforcement discovers this (albeit unwitting) line of trade.

Merchants using drop-shipping with various vendors have an added problem: They can’t keep reasonable management of which account shipments were truly theirs and which belong to the other merchants that the drop shipper works with. Without a human monitoring these shipments (or an equally vigilant automated solution) this problem becomes too cumbersome and inefficient to manage.

You may be wondering what happened to the large retailer we began with? Despite spending tens of millions of dollars in shipping and knowing a significant amount was potential shipping fraud, they opted to continue letting their merchandisers hand out shipping account numbers.

How 71lbs protects you from fraud

We empower our customers with in-depth data analytics that help identify potential fraudulent shipping and spotlight the perpetrators. Our shipping exceptions reporting is specifically designed to root out exceptions to accepted or common patterns, and our customers can set their own criteria for each.

We also perform thorough shipping audits that dissect your spend across 65 different service points and familiarize ourselves with our customers’ regular business operations to be better equipped to spot suspicious activity. Connect with us at the link below to give fraudsters a fright.

At 71lbs, we focus on two things: a) helping customers save money on shipping, and b) helping customers understand their shipping costs. We provide refunds and savings on shipping insurance, freight, and imports, among other benefits. Our automated dashboard displays easy-to-understand. shipping costs and insights so you can make better business decisions. Drop by the contact page to get in touch!

Topics: shipping fraud, shared shipping numbers, account numbers, shipping security