Ecommerce
Industry Guide:
Consumer
Electronics

If there’s one industry that defines our times, it’s consumer electronics.

hero-pillar-consumer-eletronics

Almost everything we
do these days – from
entertainment, to exercise,
to travel, to communications,
to education – is inextricably
linked to one electronic
product or another.

Whether it’s a smartphone, a laptop, a fitness tracker, a video game console, or a trusty pair of headphones, there are some devices we just can’t live without.

Gigantic companies dominate the consumer electronics industry, but the industry also thrives on innovation. Today’s anonymous brand can become tomorrow’s household name.

We can’t say for sure what the next essential consumer electronics product will be. But we do know how that product will be sold: online. In this guide, we’ll explore the global ecommerce market for consumer electronics. We’ll define the average buyer and survey some of the most promising opportunities in the field. We’ll also look at how the COVID-19 pandemic has reshaped buying habits worldwide.

Finally, we’ll examine why online payment fraud continues to plague the consumer electronics industry. We’ll propose some fraud prevention strategies. And we’ll show how ClearSale helps industry leaders guard against fraud.

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Part A: The State of the Consumer Electronics Market

I. Industry Overview

The term “consumer electronics” can refer to any type of electronic equipment intended for home or personal use (as opposed to professional use). In the modern era, most consumer electronic devices are based on digital technology.

Electronic home appliances (such as washing machines and refrigerators) are generally considered to be in a separate category. However, the two markets have begun to blend as internet-connected appliances gain wide acceptance.

According to Statista data, worldwide revenue in the consumer electronics segment is projected to exceed $375 billion in 2020. Revenue is expected to increase at a compound annual growth rate of 4.2% between 2020 and 2024, reaching a projected market value of over $443 billion.

Graphic: The Products Growing Online Sales Faster

By 2024, the number of worldwide users of consumer electronics will top 2.5 billion, which amounts to a penetration rate of 32.5% of the world population. In 2020, the average revenue per user (ARPU) in the consumer electronics industry is projected to exceed $226, Statista reports.

Gartner forecasts that worldwide shipments of devices – PCs, tablets, and mobile phones – will reach 2.16 billion in 2020, a slight increase (0.9%) from 2019.

Consumer Electronics Industry Vertical Subcategories

It is difficult to summarize the state of the consumer electronics industry because the field includes so many different types of products. Some product categories are growing rapidly in sales, while others have stagnated or are declining as the technology becomes outdated or goes out of fashion.

Here are some of the most important verticals within the consumer electronics market:

Cameras and Video Products

Sales of standalone cameras and video recorders are shrinking steadily from year to year as casual consumers increasingly rely on their smartphones for snapshots. Sales of cameras with interchangeable lenses (preferred by photography enthusiasts and professionals) remain steady.

Blogpost: Photography & videography Industry: Preparing for ecommerce in 2020





Audio Products

The audio and sound equipment subcategory includes electrical devices used to play, reproduce, or record sound: speakers, stereos, headphones, turntables, mixers, MP3 players, microphones, and so on.

One of the most promising product types within this group is the “true wireless hearable” (earbuds or headphones that are not connected by a cord or neckband). The true wireless hearable market is expected to grow by 90% from 2019 to 2020, reaching 230 million units globally.

Gaming

The gaming industry includes the hardware used to play video games (consoles, controllers, and other accessories), as well as the games themselves.

Video gaming is immensely popular around the globe. Over the years, games have migrated from arcades, to home consoles, to PCs, and they are now colonizing smartphones. Mobile gaming represented 60% of the revenue of the global video game market in 2019.

Gaming was once considered the domain of young males, but the activity now spans generations and genders. According to data from the Entertainment Software Association:

  • 65% of American adults play video games.
  • The average gamer is 33 years old.
  • 54% of gamers are male. 46% are women.
  • 60% of American gamers play on their smartphones, 52% use a personal computer, and 49% play on dedicated game consoles.

Blogpost: Industry Trends 2020: Consumer Electronics

PCs/Notebooks/Netbooks/Tablets

Larger computing devices are favored for business uses, while consumer sales have been steadily decreasing since the introduction of the smartphone.

Gartner noted a slight bump in PC sales in the fourth quarter of 2019 (due to business demand for Windows 10 updates), but contrasts that with “the ongoing weakness in consumer PC demand.”

Tablet sales are also declining, with only Apple’s iPad showing moderate signs of growth.

Mobile Phones

The smartphone revolution has so far been the most significant development in the consumer electronics industry of the 21st century. Throughout the developed world, smartphones have become essential tools not just for communication but also for entertainment, health, socializing, shopping, and work.

Global smartphone sales have leveled off somewhat, however, hovering around 1.5 billion for the past five years. This is the sign of a maturing market. (The smartphone markets in China and the emerging countries of Asia are still showing growth.)

The adoption of 5G may lead to global growth once again. Meanwhile, the market for used smartphones is booming.

Other Subcategories

Other growing segments of the consumer electronics market include:

  • Drones. By 2020, the retail consumer drone market will reach $3.3 billion in revenue (according to a Goldman Sachs report). Consumers use drones for fun and dramatic aerial photography.
  • The Internet of Things (IoT). The emerging Internet of Things is a market category all its own, but it crosses over with consumer electronics in the increasing availability of smart home devices, such as lightbulbs and thermostats. By 2023, worldwide spending on the Internet of Things will exceed $1 trillion, predicts IDC.
  • E-cigarettes and vaping. Spurred on by awareness of the unhealthy nature of traditional cigarettes, the global market for e-cigarettes and vaping devices is expanding at a rate of 23.8% per year.

Blogpost: Industry Trends 2020: Consumer Electronics

Consumer Demographics

Who is buying consumer electronics around the world? Demographics vary widely by product category and region.

For example, in the United States, 93% of millennials (those born between 1981 and 1996) owns a smartphone (according to Pew Research), compared to 68% of Baby Boomers (born between 1946 and 1964). However, adoption of tablet computers is about equal in the two age groups.

In China, only 15% of people over 45 years-old own a smartphone. Of those between 25 and 34, 35% own a smartphone.

Consumer electronics brands can expect technology adoption to expand into older age groups as time progresses. In the United States, nearly 70% of seniors are now connected to the internet.

Still, the earliest adopters of any new technology product are almost invariably younger people. A Pew Research analysis from 2016 found that men under age 50 are more likely than older men or women to prefer new technology products.

Global Differences in the Consumer Electronics Industry

The following table compares projected consumer electronics revenue and growth in various markets (all data from Statista):

table comparing projected consumer electronics revenue and growth in various markets (all data from Statista)
As for the makers of consumer electronics, Investopedia reports that China accounts for 23% of all electronics exports, followed by Hong Kong at 11%, and the U.S. at 6.8%.

digital devices

Emerging Trends in Consumer Electronics

Here are three trends we expect to shape the consumer electronics industry in 2020 and beyond:

  • Greater connectivity. As adoption of IoT expands, consumer electronic devices will become elements of interconnected, cross-functional networks. IoT-enabled devices can be monitored for malfunction, needed maintenance, or low supplies. This provides an excellent opportunity for companies to promote subscription-based maintenance or supply replenishment services.
  • Supply chain challenges. The COVID-19 epidemic is causing widespread supply chain shortages within the consumer electronics industry (see the section below). Product launches have been delayed as businesses scramble for replacement components. The successful companies of 2020 will solve this problem with innovation, encouraging procurement and engineering teams to work together to come up with creative new ways to ensure that the components in the design are ones that can be readily obtained.
  • Increased exposure to fraud. Increased volume in the consumer electronics industry will be accompanied by increased attention from fraudsters – especially as companies shift to ecommerce to compensate for the pandemic-related loss of brick-and-mortar sales.

Merchant Guide for Ecommerce Fraud Protection

II. How COVID-19 Has Affected the Consumer Electronics Industry

shoping delivery side by side with a covid mask

As of this writing, the COVID-19 pandemic has yet to abate fully. In some regions, such as the United States, the disease continues to spread widely. Many people have lost their jobs and income, and many more are concerned about how the pandemic and associated economic downturn will impact their financial situation.

The economic uncertainty brought on by the pandemic has caused consumers around the globe to rethink their spending priorities. A McKinsey report from July describes this behavior as “a shift to mindful shopping.”

Consumers in every major market expect to spend ledd on consumer electronics and more on groceries

The report states: “As consumers hunker down for a prolonged period of financial uncertainty, they intend to continue shifting their spending largely to essentials, such as grocery and household supplies, and cutting back on most discretionary categories.”

According to McKinsey, consumers in every major market (with the notable exception of China) expect to spend less on consumer electronics and more on groceries.

American spent a record $10.86 billion on video games in the first quarter of 2020 - up 90% from the year before

However, consumer electronics is a wide-ranging category. Some product types have seen skyrocketing demand during the pandemic.

For example, Americans spent a record $10.86 billion on video games in the first quarter of 2020 – up 9% from the year before. Stuck at home and inside, many consumers found comfort, escape, and connection in gaming.

PC and laptop sales also surged as the long-term reality of working and schooling from home set in.

ecommerce on smartphone

A Shift to Ecommerce

McKinsey reports that consumers in every market expect to make more consumer electronics purchases online post-COVID-19 than before. This coincides with a general global increase in ecommerce activity in 2020.

The COVID crisis has put a strain on many businesses that weren’t ready for a spike in online sales or to deal with disruptions in their supply chain.

Changes in consumer behavior have also brought new fraud patterns.

For example, first-time buyers are typically considered higher fraud risks.. But during the pandemic, the consumer electronics industry has seen more first-time online buyers than ever before. This makes sense because electronics are usually “safe” items to buy online; a smartphone is a smartphone, regardless of where you buy it.

Consumer electronics retailers can’t assume the usual patterns – such as a spike in first-time buyers, increased velocity, or increased volume – necessarily indicate fraud during a pandemic.

Merchants should adjust their fraud filters to accommodate altered buying habits. Otherwise, they will risk driving away legitimate (and new) customers.

PSD2 is here. Are you ready?

III. Consumer Electronics and Ecommerce

Consumer electronics products have been popular choices for online shoppers since the very beginning of ecommerce.

Globally, consumer electronics are part of a category that commands a 16% market share of all ecommerce sales. As our infographic on global ecommerce shows, consumer electronics is the ninth best-selling product category online.

In the United States, consumer electronics currently represent about 15% of all online sales. In fact, Amazon – an entirely online operation – is the leading consumer electronics retailer in North America.

Our own data (below) shows that consumer electronics are among the most-purchased ecommerce items in several global markets.

14_graph2-png
Leading Consumer Electronics E-tailers

Consumer electronics merchants face heavy competition online from some of the most successful companies on the planet.

In the United States, ecommerce sales of consumer electronics are led by Amazon, with $21.2 billion in revenue, followed by:

  • Apple.com, $9.77 billion
  • Bestbuy.com, $5.44 billion
  • Walmart.com, $1.98 billion
  • Dell.com, $1.94 billion

Infographic: Global Ecommerce Growth

How Can Retailers Deliver Great Online Shopping Experiences?

Here are some tips and suggestions to help your business sell consumer electronics successfully online:

1. Optimize Your Website

A smoothly-functioning website doesn’t just make the buying experience more pleasant for consumers (although it does do that). It also speaks to the quality of your products.

Tech buyers expect well-built products that are user friendly and frustration-free. Your website should be the same. That means it should load quickly and be easily navigable on any screen. Keep in mind that mobile users will account for at least 45% of U.S. ecommerce this year.

2. Enhance the Shopping Experience with Videos

More and more electronics consumers turn to ecommerce these days because they can’t (or are afraid to) visit brick-and-mortar retail stores.

But these buyers still want to see your products in action before they buy. A well-shot video can compensate at least somewhat for the inability to try out products in a store.

In fact, after watching online product videos, shoppers are 144% more likely to add a product to a cart and 73% more likely to purchase a product.

3. Step Up Your Instagram Presence

Instagram is among the most-trafficked social media platforms in the world. It’s the ideal place for electronics companies to showcase their products. Read our article on how to turn your brand’s Instagram presence into a sales-generating machine.

4. Simplify the Checkout Process

A long, drawn-out, and confusing checkout procedure is one of the main reasons the average ecommerce site loses 75% of the value of potential sales to cart abandonment. A speedier checkout process can recapture much of this revenue.

A customer-friendly checkout process includes:

  • Single-page checkout (as opposed to multiple steps).
  • Mobile optimization.
  • Multiple payment options, such as Apple Pay and PayPal, in addition to the common credit card brands.
  • The option to checkout as a guest (rather than creating an account).
  • The total order cost upfront, including shipping and taxes.
  • A minimal number of data fields.

5. Avoid Needlessly Aggressive Fraud Filters

Fraud prevention is critical – especially in the consumer electronics industry (as you’ll learn below). But if your anti-fraud filters are too restrictive or burdensome, they may cause you to lose legitimate customers.

For example, velocity filters (which prevent customers from making multiple orders within short periods) can shut down impulse buys. This means if someone buys a video game console and then decides on the spur of the moment to splurge on an expensive controller, your fraud filter might stop them. Later in this guide, we’ll discuss some alternatives to rigid rules-based filters.

infographic: 7 important ecommerce metrics and how to calculate them

Shopping online in smartphone

Part B: Consumer
Electronics and Fraud

IV. Fraud Risk in the Consumer
Electronics Industry

As ecommerce grows around the world, so does the prevalence of payment fraud. Card-not-present (CNP) fraud is especially on the rise, even as in-person fraud declines due to widespread adoption of payment card chip technology. CNP fraud occurs when someone uses another person’s payment card information online without authorization.

https://www.pymnts.com/news/retail/2019/merchants-cnp-fraud-customer-data/

The COVID-19 pandemic may result in even higher levels of fraud. Economic pressure, confusion, higher demand for certain products, and new entrants into the ecommerce market may combine to embolden fraudsters.

High-tech consumer electronics are perennial hot targets for online payment fraud. Their typically high dollar value is just one reason why. Other reasons include:

  • There is always a demand for the latest tech products. Fraudsters know they can quickly find buyers.
  • Electronic devices tend to be small and easy to ship and store (think smartphones, tablets, laptops, and wearables). The carrying cost is relatively low for fraudsters.
  • Consumer electronics can usually be resold at a price close to the purchase price. That means more money for the fraudster.

A robust resell market for hard-to-find consoles such as the Nintendo Switch makes the video game industry a particularly enticing target for fraud in 2020.

Fraudsters also like to use stolen payment information to purchase “virtual items” within games. Luan Da Silva, supervisor of operations at ClearSale and a gaming enthusiast, explains why:

“Every time there’s a sale online, like someone selling virtual clothes or swords in games for real money — there’s the potential for fraud. It’s not uncommon for someone to pay for an item and to not get what they paid for.”

Making things even more complicated, this industry attracts plenty of first-time buyers, making it difficult for fraud filters to determine the validity of a sizeable number of transactions – ultimately weakening the filter’s ability to predict fraud patterns.

Cryptocurrency Risk

Cryptocurrencies (also known as digital currencies), such as Bitcoin (BTC), Ethereum (ETH), or LiteCoin (LTC), are gaining popularity in the world of ecommerce, especially among technologically sophisticated consumer electronics customers.

Consumers like cryptocurrency for its security and anonymity. (Cryptocurrency transactions take place in the decentralized environment of the blockchain.)

Ecommerce merchants are attracted to cryptocurrency because it takes third parties out of the payment process. That means:

  • Transactions are irreversible. There are no chargebacks with cryptocurrency.
  • Transaction fees are negligible.
  • Transactions resolve quickly.

If you’re thinking about incorporating cryptocurrency into your ecommerce store, read this cryptocurrency for ecommerce article now.





5 Types of Fraud Consumer Electronics Ecommerce

Fraudsters are smart and can be quite advanced when it comes to their methods and tactics. Here are some of the more sophisticated attacks merchants may encounter:

virtual attack

Holiday Attacks

Fraudsters know many electronics retailers won’t be prepared to handle big spikes in sales volumes during the holiday shopping season, particularly on Black Friday and Cyber Monday. They use this opportunity to step up their testing of merchants, and once they find a weakness in the merchant’s armor, they attack with full force.

Triangulation Schemes

The fraudster, who has purchased stolen credit card information on the black market, lists a popular electronics item (like a laptop or mobile phone) for sale on an online marketplace. When an unsuspecting consumer pays the fraudster for the item, the fraudster uses the stolen card information to purchase the item from a retailer and ship it to the consumer. The fraudster then pockets the money.

Counterfeit Barcodes

Fraudsters go to retail stores, find high-priced items, and place fake barcodes on top of actual barcodes to artificially lower the product cost. The fraudster purchases the item at the reduced cost and then resells it online for at or near the actual price.

Account Takeovers

Fraudsters purchase a consumer’s information on the black market and take over that consumer’s mobile phone account. The fraudster then contacts the phone carrier and poses as the consumer to purchase new phones at low or no cost through the carrier’s subsidized purchase program. The fraudster can now quickly sell the new phones for a profit.

Shipping Scams

The fraudster places an order and initially sets the delivery address to match the billing address. Once the order is approved, the fraudster contacts the merchant and changes delivery address. Alternatively, if the fraudster is located in a high-risk area, they might use the delivery address for a freight forwarder. This can mask the true destination of the package and prevent the merchant’s fraud filters from flagging the order as suspicious due to geographically based risk.

The Cost of Fraud in the Consumer Electronics Industry

Card-not-present fraud can lead to significant losses for consumer electronics retailers.
There is, of course, the cost of manufacturing and shipping a product you may never get back. Then there are reputational costs. These costs are harder to quantify, but they are very real.

Consumer electronics brands are, in many ways, similar to luxury brands. Customers adopt their favorite electronics makers as status symbols or crucial elements of their lifestyle. Customer loyalty matters a great deal to electronics brands.

However, fraud can unsettle customers, disrupt their image of a brand, and drive them to try alternatives, especially when they’re considering spending hundreds of dollars on high-end devices.

Chargeback fees

Chargeback Fees

Another (more quantifiable) way electronics retailers pay for fraud is through chargebacks. A chargeback occurs when a cardholder notices a transaction they don’t recognize on their statement. The cardholder will dispute the charge with their credit card issuer.

The card issuer will investigate the charge. If they determine the claim is legitimate, the card issuer will refund the payment. The merchant will be debited for the refund plus an additional fee (called a chargeback fee).

Chargeback fees can range from $15 to $100 or more per transaction, often exceeding the cost of the product itself. If a card issuer decides a company is incurring too many chargeback fees, it may increase the fees or remove that company’s ability to accept credit card payments altogether.

In 2017, we reported that the items most at risk for chargebacks include “high-end merchandise” and “products that can easily be resold.” Consumer electronics check both these boxes.

False Declines

False Declines

Card-not-present fraud is indeed a problematic issue for online retailers. But merchants should be wary of “overcorrecting” for the problem. False declines can be just as costly – if not more so – as fraud.

Every online transaction must pass through several gateways on the way to approval. At each step, filters are configured to spot the indicators of fraud. Sometimes, these filters will “catch” and block an entirely legitimate transaction. When this happens, it is called a false decline or a false positive.

False declines are nearly always the result of automated fraud prevention software.
Fraud filters are driven by powerful algorithms that calculate the risk of fraud based on hundreds of factors, starting with the basics, such as location, delivery address, and shipping speed. These algorithms can be extremely effective at stopping fraud, but they can also sweep up legitimate transactions in the process.

False declines are more common than you might expect:

Are you leaving money on the table


False declines are more than just a moderate annoyance for customers. U.S. merchants lose nearly $118 billion each year to false declines; that’s more than 13 times the cost of credit card fraud.

It may be helpful to think about false declines from the point of view of a customer.
Consumer electronics purchases are often the culmination of extended periods of product comparisons, reading reviews, and saving up. Now, imagine, after all that, being blocked from buying. It can be extremely frustrating – enough to turn you off a brand forever.

More than 80% of cardholders who experienced a false decline said it was embarrassing and aggravating. In Javelin’s survey of 3,200 U.S. consumers, 32% said they wouldn’t shop with a merchant again following a decline.

False declines are particularly damaging for the consumer electronics industry. Unlike with apparel or niche sectors, it's very easy to find the exact same product (sometimes for the very same price) via other merchants. If a customer’s order is declined, odds are good they will go to a competing business. There are very few second chances in this hotly competitive market.

Additionally, in the era of social media, a single dissatisfied customer can take others with them. Negative reviews can hurt your brand’s reputation. Studies have shown that consumers tend to perceive negative ratings and feedback as more credible than positive information.

Learn how to protect your business from false declines and chargebacks in our free webinar for small and midsized merchants.

Webinar: How m uch do chargebacks and false declines hurt your business?

V. How the Consumer Electronics Industry Can Combat Ecommerce Fraud

To prevent fraud, you should start by identifying the risk of fraud to your particular ecommerce business. Fraud rates vary depending on factors like region, industry, payment types accepted, and the affluence of your customers.

For example, the United States, with its wealthy residents and robust ecommerce economy, is a prime target for online fraudsters. Experts project cumulative losses in the U.S. of over $70 billion to fraud over the next five years.

In an emerging ecommerce market, such as Mexico, fraud rates may appear low, but that can be deceiving. In Mexico, about 14% of orders are rejected due to suspicion of fraud, even though 80% of online purchases are legitimate.

Ebooks and guides about ecommerce

ClearSale internal data (below) groups electronics into a high-risk group with other high-value categories, such as jewelry and watches/glasses.

Category X fraud riskdata on groups electronics into a high-risk group with other high-value categories


What Role Does the Credit Card Provider Play in Preventing Fraud?

Ecommerce merchants are not on their own when it comes to preventing fraud. The banks that issue payment cards have their own processes for investigating and stopping fraudulent transactions.

When a customer disputes a credit card payment, it’s up to the issuing bank to verify that fraud occurred. If the investigation reveals that the claim is legitimate, the bank will send notification of the chargeback back through the payment chain.

Therefore, it’s in your best interest as a merchant to prevent fraud before it happens. After the fact, you will be responsible for chargeback fees.

What Do Fraud Analysts Watch For?

Fraud analysts with experience and expertise in the consumer electronics industry learn to distinguish the buying patterns of legitimate customers from fraudsters.

Here are three common scenarios that tell knowledgeable fraud analysts a transaction is not fraud:

  • Warranties are purchased. A fraudster wouldn’t require a warranty on a product they intend to resell.
  • Orders are shipped to military addresses. It would be almost impossible for a civilian fraudster to retrieve a package from a military post office.
  • Orders are placed on mobile devices. Fraudsters tend to default to the easiest devices for online shopping: desktop computers.

If your fraud program declines all suspicious orders and ignores mitigating factors like these, it could mean your business is losing revenue and customers.

How ClearSale Fraud Analysts Make Their Decisions
Consumer Electronics Industry Efforts to Fight Fraud

The major players in the consumer electronics industry understand that online payment fraud can weaken their reputations, damage their customer relationships, and undermine their profits. Since the earliest days of ecommerce, electronics firms have taken the lead in securing their customers' online shopping experience.

At the end of 2018, LastPass ranked online retailers into a “naughty” and “nice” list according to the security of their ecommerce sites. The criteria included anti-fraud measures such as strong password requirements, two-factor authentication, and HTTPS. Consumer electronics giants Apple and Best Buy topped the list.

Another recent industry development is Recipero’s AssetWatch solution. The AssetWatch software tracks electronic devices by serial number to ensure they end up in the hands of intended recipients. By preventing fraudsters from engaging in the fraudulent resale of electronics, the program helps merchants like GameStop, Sprint, and Amazon reduce their losses from lost or stolen items.

Verifying Purchases While Preserving the Customer Experience

Data security is vital to online shoppers in every market (see chart below). But safety is not their only concern. Most consumers expect a smooth, efficient checkout process.

Graphic: Data security perception

According to a 2020 ClearSale survey of over 1,000 American consumers:

  • 64% of respondents said they would not proceed with a purchase if they were asked to call customer service to confirm some data.
  • 80% said they would not proceed with a purchase if they were asked to send copies of documents to confirm an order.
  • 35% said that if a merchant declined their payment, they would not try again before moving on to another website.
  • 33% said that if a merchant declined their payment, they would never shop with that merchant again.

The numbers are similar in other markets. The takeaway is that electronics merchants need solutions that verify their customers' identities without imposing onerous steps or triggering frequent false declines.

False Declines Report
Here are five key strategies for reducing false declines, chargebacks, and CNP fraud while providing the high-end shopping experience consumers demand from electronics retailers:

5 Best Practices for Preventing Fraud While Preserving Customer Experience

 

1. Determine Which Merchandise Carries the Highest Risk of Fraud

As mentioned above, small-yet-valuable items such as smartphones, smartwatches, tablets, and laptops tend to draw the most attention from fraudsters. The latest trendy tech (such as the most recent iPhone) also commands a high price on the resale market.

Try tracking chargebacks and friendly fraud to identify trends and commonly targeted merchandise. These items are where you should focus your fraud-prevention efforts.

2. Remember, Red Flags Don’t Tell the Whole Story

Buyers of big-ticket consumer electronics often follow the same behavior as fraudsters, such as high-dollar value purchases and non-matching delivery/billing addresses. (Tech items are popular gifts.) First-time buyers may also get swept up by automated filters.

Electronics merchants require advanced fraud protection methods that can tell the difference between criminals and legitimate customers based on a broader analysis, ideally one that involves expert manual order review.

3. Keep an Eye on Your Customers’ Shopping and Browsing Behavior

Fraudsters tend to add expensive electronics items to their carts on their first visits without additional browsing or shopping around. This is the opposite behavior of typical electronics customers, who tend to compile extensive browsing histories as they research purchases on the ecommerce sites of their favorite brands.

Loyal fans will often visit a site multiple times before buying. (This is not always true, however, which is why manual review is crucial when automated fraud warning systems are triggered.)

4. Reach Out to Customers

After receiving a suspicious order, merchants should call customers directly to confirm the purchase. While doing so may bother some customers, it’s better than the alternative (which is to simply decline the order). If you frame your calls as a service to protect your customers, you can improve the client-merchant relationship while protecting against fraud.

5. Choose a Solution That Offers a Fraud Protection Guarantee

A guarantee will protect your business from the cost of fraud-related chargebacks and false declines while allowing for safe international expansion and continued growth.

False Declines Industry Report

VI. How ClearSale Helps Consumer Electronics Companies

ClearSale takes a managed services approach to preventing fraud. We combine advanced statistical and artificial intelligence with the world’s largest team of specialized fraud analysts to deliver a balanced, real-world solution unlike anything else in the ecommerce market.

With ClearSale, ecommerce merchants receive:

  • Simple ecommerce integration. Our fraud protection solutions quickly integrate with all major ecommerce platforms via an easy-to-install plugin.
  • Near-immediate order approvals. Even our human analysts are fast.
  • Comprehensive protection against fraud. ClearSale’s Chargeback Insurance program offers 100% guaranteed coverage of all fraud-related chargebacks.
  • The highest approval rates on the planet. Our system will never auto-decline an order.
  • An innovative approach. Our multitiered team approach to fraud prevention lets us continually calibrate our proprietary statistical model as new fraud patterns emerge in the wake of the COVID-19 epidemic.

ClearSale is a trusted fraud prevention partner in the consumer electronics industry. Clients like Garmin, BlueRobotics, Asus, and Motorola have seen impressive results after partnering with us, including:

  • 98.5% approval rates.
  • 80% reduction in false declines.
  • 99.6% decisions within 24 hours.
  • 98% drop in chargeback ratio.
  • 100% customer satisfaction.

Case Study:

Motorola

ClearSale Helps Motorola Wipe Out Chargebacks and False Declines in Mexico

Iconic mobile phone brand Motorola wanted to make a big splash on Mexico’s two busiest online sales days, Black Friday and El Buen Fin (“the good weekend,” a nationwide shopping event launched in 2011 by the Council of Business Coordination). But Motorola knew that its products would be enticing targets for fraudsters, thanks to strong brand recognition, along with the small size and high resale value of Motorola’s devices.

To make the situation even more challenging, Motorola expected order volume to grow tenfold during these peak sales periods, making it nearly impossible to keep up with accurately screening and flagging suspicious transactions.

Motorola needed a fraud protection solution that would:

  • Integrate seamlessly with its ecommerce platform.
  • Provide prompt reviews of transactions.
  • Let Motorola quickly and confidently approve orders during high-volume sales periods and year-round.
SEE FULL CASE STUDY

Learn more about our work with some of the world’s leading consumer electronics brands and to get in touch with us to discuss protecting your revenue from fraud.

Fraud Prevention for Consumer Electronics

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