Nothing prepared ecommerce merchants for the sudden COVID-19 pandemic-induced online sales jolt. Ecommerce sales in 2020 increased 50.5% over 2019. While growth projections stabilized and returned to pre-pandemic levels in 2021, revenue is forecast to reach 7.4 trillion dollars by 2025.
While most ecommerce businesses have thoroughly enjoyed riding this high, this unforeseen rise in sales has ushered in a slew of unforeseen challenges for many. One of the biggest? That their fraud prevention solution is not easily scalable.
As online sales have risen, ecommerce fraud rates have increased exponentially. A recent TransUnion credit bureau report cited a 25% increase in online fraud attempts in the U.S. within the first four months of 2021 alone, compared to the last four months of 2020. And as tactics grow more sophisticated, ecommerce merchants are facing much more severe consequences.
Insufficient fraud prevention affects businesses in many ways. Lack of a scalable, effective solution leads to the following pain points:
While many customers request chargebacks for valid reasons, this functionality is often misused by fraudsters to take advantage of how banks require businesses to prove a chargeback was fraudulent – after the chargeback has already taken place. This saddles merchants with:
An overly restrictive approach to ecommerce fraud prevention results in perfectly valid orders being declined for all sorts of arbitrary reasons, resulting in:
While manually reviewing each order can help to prevent good orders from being falsely declined, this is not a sustainable solution in the long term. Manual fraud prevention is:
Many brands also found that as orders and fraud cases increased, so did cart abandonment rates. What many merchants aren’t aware of is that rudimentary fraud prevention is actually the cause of a substantial percentage of cart abandonment.
Complicated checkouts deter customers from completing a purchase, as does mandating the registration of a store account. According to Baymard Institute, ‘the site wanted me to create an account’ resulted in 24% of cart abandonments, while a ‘too long/complicated checkout process’ was the cause of almost a fifth (17%) of abandoned carts.
To prevent fraud, many ecommerce merchants ask customers to fill out more fields than necessary to complete a purchase. Fields such as ‘billing address’ and ‘phone number’ are used primarily to identify the legitimacy of a customer.
In essence, all ecommerce shoppers are treated as potential fraudsters as opposed to valued customers.
Here are some tips on how to continue to enjoy the ecommerce boom while mitigating the accompanying challenges.
Look for a fraud prevention solution that focuses on approving, not declining orders. This is a solution that focuses on legitimizing orders. It needs to be intuitive and pre-emptive, coupling machine learning technology with human oversight, to ensure flexibility and allowances for ever-changing fraud trends and consumer behaviors.
Real-time fraud prevention that’s built into a checkout solution removes many layers of friction that would otherwise lead to cart abandonment. A dynamic checkout recognizes customers from across a global network of retailers and uses device recognition to enable shoppers to checkout with minimal information.
NoFraud’s fraud prevention and checkout solutions provide a better experience for merchants and shoppers alike. Merchants are free of any fraud concern or liability. NoFraud provides real-time decision-making, conducts any necessary reviews, offers chargeback management services and a full financial guarantee.
NoFraud Checkout is a sleek, frictionless one-page checkout. Shopping cart contents are displayed along with a link to the return policy, so there is no reason for a customer to leave the checkout page.
Most importantly, NoFraud implements fraud prevention in sync with the customer. As the shopper inputs their information, NoFraud dynamically adapts so that the fewest possible fields appear. A customer recognized on the NoFraud network can complete the checkout with as little as their email address (and all other information can be auto-filled with one click), if a customer presents a higher risk, fields will appear in real-time to provide maximum protection to the merchant.
Losing out on perfectly good orders due to an ineffective ecommerce fraud prevention strategy doesn’t just hurt your bottom line; it also spells bad news for your fulfillment operation. Fluctuating order volumes can result in ineffective workflows that impact turnaround times, which means dissatisfied customers.
Whiplash and NoFraud are committed to helping merchants eliminate ecommerce fraud while increasing order approval rates to grow revenue. Together, we ensure that the right orders are seamlessly fulfilled, fraudsters and chargebacks are mitigated, and customer support tickets are kept to a minimum.
Find out how the Whiplash + NoFraud partnership can assist your business in creating a streamlined customer experience from checkout to delivery.