Drop shipping businesses handle the risk of fraudulent orders by:

1. Implementing fraud detection tools: Utilizing software that flags suspicious orders based on IP address, location, and payment method.

2. Verifying orders: Manually reviewing orders that trigger fraud alerts to ensure legitimacy.

3. Requiring CVV and AVS: Mandating card verification value (CVV) and address verification system (AVS) to ensure cardholder authenticity.

4. Using 3D Secure: Requiring an additional security step for online credit and debit card transactions.

5. Monitoring order velocity: Flagging multiple orders from the same customer or IP address within a short timeframe.

6. Watching for suspicious email addresses: Being cautious of orders placed with temporary or disposable email addresses.

7. Verifying shipping addresses: Ensuring shipping addresses match billing addresses or are legitimate business addresses.

8. Limiting high-risk orders: Restricting orders from high-risk countries or regions known for fraud.

9. Collaborating with suppliers: Working with suppliers to identify and prevent fraudulent orders.

10. Keeping records: Maintaining detailed records of orders, customers, and fraud attempts to aid in future fraud detection.

By implementing these measures, drop shipping businesses can minimize the risk of fraudulent orders and protect their operations.