Anti-fraud strategy: Help boost your sales

An anti-fraud solution must balance revenue, fraud prevention, and the e-commerce shopping experience. Protecting your business means taking care of your customers and implementing a good strategy that helps you boost your sales, largely avoiding false positives .

Many businesses believe that protecting themselves from fraud means having a solution that identifies purchases that could be considered suspicious and prevents them from being made in order to avoid chargebacks, however, 90% of these rejections are valid transactions , which leads you to stop earning. large sums of money.

One of the most common examples of an erroneous rejection (also called “false positives”) is when a cardholder makes a large purchase and when entering the shipping address indicates a location other than the customer's billing address , i.e. That's when an inefficient solution wrongly identifies you as a scammer.

The consequences for your e-commerce are enormous, among them are: 

  • Decrease in income.
  • Dissatisfied customers.
  • Bad reputation.

The true cost of False-Positives 

There is no better way to understand a problem than to pose it with numbers, so imagine the following:

Every $1 of erroneous rejections costs merchants $13, while 58% of customers who were prevented from purchasing do not return to that business . Given this, the value of each customer becomes even more quantifiable and the investment that will be required in marketing to replace those customers is even more expensive.

According to a study conducted by Aite, in 2021 losses from false positives were almost 70 times higher than losses from fraud while 62% of merchants mention that their erroneous rejection rates are increasing.

Therefore, it is not surprising that in this industry where competition is the order of the day; A great shopping experience can be the key differentiator for smart merchants.

Dissatisfied customer = Bad reputation 

Although for some e-commerce it may be common to have false positives, the reality is that being rejected does not make customers happy, on the contrary it causes frustration, discontent and even embarrassment, which has an impact on the reputation of the brand. , share value and customer loyalty. 

Currently social media is the perfect tool for customers to share their shopping experiences where detractors are twice as likely to talk about bad brand experiences. 

But that is not the only data, the importance of a good shopping experience translates as follows: 

  • A customer is 4 times more likely to go to your competitor if the problem is service-related, rather than price or product-related. (Bain & Company)
  • Regular customers spend 2 times more than new customers. ( McKinsey)
  • 96% of consumers rank customer service as an important factor in their choice of brand loyalty. (Microsoft)
  • A promoter has a value 1400% higher than a detractor. (Bain & Company)
  • For every customer who complains to the customer service department, there are 26 unhappy customers who don't bother to contact the company. (TARP Investigation)

With this, electronic businesses must be aware of:

  • H aving a fraud prevention system that takes into account customer behavior and purchase history is essential to avoid purchase rejections.
  • Have a chargeback prevention guarantee, which combines hybrid technology and artificial intelligence.

Both elements are the perfect allies to improve the user experience and reduce sales losses to a minimum.

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