The COVID-19 global pandemic rapidly increased the adoption of ecommerce, resulting in U.S. online sales to grow significantly over the last two years. In 2020, there was a reported $762 billion in online sales and, in 2021, that number increased another 14.2% to $870 billion.
Just as online shopping has evolved, the tactics of fraudsters looking to take advantage of personal information have become more and more sophisticated, making it harder for merchants to prevent. In 2021, global ecommerce losses to online payment fraud were estimated at $20 billion U.S. dollars, up from $17.5 billion in 2020.
Online fraud is an ongoing concern that all ecommerce enabled retailers and big-ticket retailers, in particular, should proactively manage. As targets, merchants must constantly evolve their fraud management workflows, tools, and teams. With the right precautions in place, businesses can stay ahead of fraud to protect their customers and reduce chargeback costs.
Keeping up with the latest ecommerce fraud prevention methods can be challenging. By maintaining a focus on industry trends and techniques to combat fraud, Blueport Commerce has continued to expand on how we approach and manage fraud prevention for our clients.
Evaluate data to drive better outcomes by creating and continually reviewing KPIs.
With a combination of expert manual review and AI, teams can measure and test fraud review rule performance. A successful set of rules will minimize friction for good orders while preventing fraudulent orders from being processed. Keep in mind that historical review rules may not always be the best predictor of future fraud, so it’s important to review the data and trends and adjust accordingly.
Study your chargeback data to become knowledgeable about their origin. Determine if there are trends among fraudulent orders and look for opportunities to update descriptor messaging to prevent friendly fraud or service issues from being filed in the first place.
Connecting with professionals in other verticals will shed light on common fraud trends and provide your business with creative, yet practical, strategies to minimize fraud. Although your ecommerce fraud prevention methods will vary depending on your business model, sharing knowledge is invaluable and will help you think outside of the box.
Fraudsters’ methods continue to evolve as technology advances and more tools become available. Most recently, in the FIS/Worldpay risk mitigation survey, researchers found that more than half of merchants in 11 countries saw increases in synthetic identity fraud, account takeover fraud, and identity theft/new account fraud in 2020. Synthetic identity fraud alone was found to have increased 55% in 2020 and continues to be a significant source of fraud in 2022.
Leverage all data points and available information to build a physical case that tells a digital story. By organizing the fraudulent activity and linking virtual evidence, you will position yourself favorably with law enforcement if you choose to prosecute fraudsters.
Running and managing an ecommerce business is a full-time job in itself. Add in researching and acting on ecommerce fraud and you might find yourself juggling to stay on top of everything.
At Blueport, we pride ourselves in protecting our customer information with world-class monitoring and support. We take care of it for you, so you can rest easy and focus on what matters most to you.
Contact us today to learn more about how Blueport can help your business mitigate ecommerce fraud!