Besides using a realtime gateway processor such as Authorize.net, and using Address Verification Service (AVS) and Card verification values, you can also check the IP number that is associated with the order. Every ShopSite order shows the IP number of the customer who placed the order. There are a few places you can go to on the web to check this IP number:
Arin has an IP lookup at the top of the page that will tell you the ISP that owns the IP block. If your customer says they are from Texas, but the ISP who owns the IP is in Latin America or Asia, this can be sign of fraud. Note that the ISP that owns an IP in the United States may not match the state the customer is from, as Arin.net shows the address of the ISP's corporate headquarters, not where the IP came from.
2. Other free services that offer IP to country/state lookups are: