Fraud is a consistent problem for ecommerce businesses. It’s tempting to utilize all the fraud prevention tools at your disposal to ensure that nothing seeps through the cracks. Unfortunately, fighting too hard against fraud can negatively impact your users’ experience and overall sales. While a 0% chargeback ratio sounds great, it’s not worthwhile if it means you are turning away 10% of your legitimate customers due to false flags from your security solutions.
Fraud has to be preemptively prevented without intruding on an honest customer’s shopping experience. An overly stringent fraud prevention system poses a risk of turning away genuine customers. If it happens often enough, you’ll face lower conversion rates and unhappy users. On top of that, every suspicion generated from your system can trigger manual reviews, which cost money and time. If most of these reviews are done on legitimate customers, this combination of lost sales and associated chargeback management costs could cause your anti-fraud efforts to work against you.
The success of your online anti-fraud efforts is a balancing act. To find that balance requires continuous research and reevaluation of your current security policies. Stay up-to-date on the latest trends in fraud, as well as fraud-fighting technology. You also need to closely monitor the fraud data your team has accrued to find out which areas require the most focus. All of the trends, patterns, and insights you find in “big data” can be useful for establishing profiles that distinguish fraudster from customer. With some tweaking, you can find a system that preserves user experience while protecting your site from fraud.
