The retail industry has changed due to the recent exponential expansion in e-commerce, which provides customers with an infinite selection of products at their fingertips along with unmatched ease. But along with this digital boom, there has also been a noticeable increase in fraudulent activity, which puts firms at great risk of financial loss.
Preventing e-commerce fraud has become a top responsibility as online shopping has become a norm as it offers ease of shopping, better deals, and easy delivery of goods right where you want them. But this comes at the risk of fraud- various e-commerce frauds for E-commerce companies and customers call for using e-commerce fraud prevention tools.
Online merchants must use strategic thinking to maintain control over their profit margins in a highly competitive industry with constantly shifting global economic conditions. Unfortunately, increasing prices or decreasing expenses (or doing both simultaneously) is the only surefire way to increase margins. Since most internet shops prefer to reduce expenses rather than raise prices, they lose customers. E-commerce fraud prevention is one way online businesses may work more profitably and cut costs before you start looking into new product packing techniques or revising your return policy.
Global e-commerce fraud is increasing, and so are the financial consequences for online companies. It’s predicted that by the end of the year 2023, the loss would have risen to $48 billion, with merchants in North America set to suffer the brunt—that is, to contribute 42% of the whole cost.
Four strategies to make your e-commerce fraud protection staff more valuable
To ensure that preventing fraud is a valued objective within their company, e-commerce fraud prevention teams can use these four tips.
Learn Your KPIs.
The CyberSource Fraud Benchmark Study states that 62% of retailers consider their chargeback rate the most crucial key performance indicator. So, if lowering chargeback rates is your top priority in preventing e-commerce fraud, then let’s stand back and examine the wider picture.
Auto-accept
How many orders are accepted with no chargebacks after being manually reviewed by your e-commerce fraud prevention team? The survey mentioned above indicates that 89% of orders that are forwarded for human inspection are ultimately accepted by retailers. This is a fantastic chance to raise your auto-accept rate, which will expedite order fulfillment, improve customer satisfaction, and lower the overall cost of manual review. It’s simple to monitor your auto-accept rate. But there are additional metrics you can measure as well, including the frequency of transactions that are executed within a certain period.
False Positive- Customer Insult
Theoretically, you could catch every chargeback, but doing so would negatively result in rejecting loyal consumers or “false positives.”
Up to 10% of orders that merchants reject are thought to have been from satisfied customers. Thus, one of the fastest ways to boost revenue is to determine what drives your e-commerce fraud detection team to turn away potential clients.
Your e-commerce fraud detection staff might also have more time to inspect rejected orders to determine what may have been an acceptable transaction if they had fewer orders to review. Perhaps there’s still time to save the order! If not, they can either take that client on board or work with you to reexamine the reasons behind the rejection of those deserving clients. You can demonstrate your attention to the wider picture to your leadership by presenting them with a reduction in lost revenue.
Make Your Ruleset Better
In the fight against e-commerce fraud, many of us fall victim to a reactionary loop. Sometimes, scammers seem to be one or two steps ahead of us. We only discovered it after they devised a new method to surpass the e-commerce fraud detection guidelines we established.
Naturally, this intuition tells us to constantly assess how well our ruleset is working and prepare for any potential e-commerce fraud threats. Is your business, for instance, introducing more digital SKUs? Is marketing introducing a campaign offering 20% off electronics? Is a new affiliate in charge of sales? To be ready, anyone committed to preventing e-commerce fraud must be mindful of these developments before they occur.
Increasing revenue is your company’s primary objective. Making sure those sales are healthy revenue is your responsibility for preventing e-commerce fraud. What guidelines can you create to recognize and remove your loyal clients from your review queue?
Thanks to advanced data science and machine learning, you may automatically accept those excellent consumers by using match statuses and risk signals provided by one API request.
Reduce Your Usage Of Free Tools
When selecting your tools for preventing e-commerce fraud, keep the following two factors in mind:
What Is The Value Of Your Analysts’ Time?
How much money do they lose because they can’t use their present tools or have none to make the right decision?
How much time does your team of manual reviewers spend looking through four or five free tools before deciding? Even more crucially, how certain are they about their choice? Would your e-commerce fraud detection team be able to make choices more quickly and accurately with one or two premium technologies that come with decent support? Yes is always the response.
Effective management gives your staff the tools they need to do their work. Don’t be afraid to use paid tools even though you can find comparable information for free online. Nothing is free; you must pay for it with either lost income time or both.
Don’t Ever Quit Tracking Your ROI
Did the team that prevents e-commerce fraud stop an attack on your company?
Determine the amount of loss that could be prevented if you had mechanisms to stop e-commerce fraud. Show that to your leadership team so they can realize the potential savings on lost revenue from e-commerce fraud. Recognize the worth of your investments, comprehend the rationale for increasing funding for further technologies, and establish the initial significance of e-commerce fraud prevention. Businesses must remain alert and aggressive to prevent e-commerce fraud as the digital marketplace develops and grows. Companies can drastically lower the chance of suffering financial loss due to fraudulent transactions by realizing the necessity of utilizing various strong preventative solutions.
