Anti-fraud strategy: Help boost your sales
An anti-fraud solution must be the balance between revenue, fraud prevention and the e-commerce shopping experience. Protecting your business is taking care of your customers and implementing a good strategy that helps you boost your sales by 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 to losing money. large sums of money.
One of the most common examples of an erroneous decline (also called “false positives”) is when a cardholder makes a large purchase and when entering the shipping address, it points to a place other than the customer's billing address . That's when an inefficient solution misidentifies 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 declines costs merchants $13, while 58% of customers who were denied purchases never 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 carried out by Aite, in 2021 the losses due to false-positives were almost 70 times more than the losses due to fraud while 62% of the 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 savvy merchants.
Dissatisfied customers = Bad reputation
Although for some e-commerce it may be common to have false-positives, the reality is that customers are not happy to be rejected, on the contrary, it causes frustration, discontent and even shame, which has an impact on the brand's reputation. , stock value and customer loyalty.
Social networks are now 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 turn to your competitor if the problem is related to service, rather than price or product. (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 is worth 1400% higher than a detractor. (Bain & Company)
- For every customer who complains to the customer service department, there are 26 disgruntled customers who don't bother to contact the company. (TARP Investigation)
With this, electronic businesses should be aware of:
- Having a fraud prevention system that takes into account customer behavior and purchase history is essential to avoid purchase rejections
- Have a chargeback prevention guarantee that combines hybrid technology and artificial intelligence.
Both elements are the perfect allies to improve the user experience and reduce sales losses to a minimum.