An executive snapshot for ecommerce leaders
With the ecommerce shopping surge comes a wealth of opportunity for fraudsters. They’ve become more sophisticated, leveraging multilevel crime rings and AI bots to mimic valid users. Not only do ecommerce businesses have to protect themselves and their customers from fraud, but they also struggle to distinguish between fraudsters and valid customers. At the same time, businesses can’t be too strict and turn away good orders through false declines.
This balance of fraud protection and establishing trust in the customer’s buying journey presents a challenge. When a customer’s order is falsely declined, that trust is broken.
Today’s companies have to focus on customer experience (CX) to attract and maintain a loyal customer base. Among the many factors that impact CX is fraud prevention.
That presents online businesses with a dilemma. They need to bring their fraud prevention “A” game to provide a superior customer experience without making it a hassle.
Just about every ecommerce platform comes standard with fraud filters that use transaction screening and algorithms to fight fraud. While fraud filters are useful, they tend to be overly strict and result in false declines — when a customer’s valid order is declined because the business mistakes it as fraudulent.
Customers don’t like being declined. Many will never shop on a site again after they’ve experienced a false decline. Even worse, some will take their complaints to social media, potentially creating a negative reputation for the company.
That presents online businesses with a dilemma. They need to bring their fraud prevention “A” game to provide a superior customer experience without making it a hassle.
When you factor in the customers who won’t re-attempt to make their purchases, those who will never shop on your site again, and customers who complain on social media, you can see a significant cost.
In financial terms, it’s safe to assume that every $1 in false declines equals a loss of $13.
False declines also tear away the foundation of consumer trust because they deliver the opposite of what today’s customer wants — personalization — 71% of customers expect to have personalized interactions with companies they frequent.
Businesses must balance fraud prevention and order approvals while, at the same time, establishing and maintain consumer trust. This highlights the need for a customer-centric approach, which can include:
Allows brands to align content, influencers, advocacy and community with customer needs, wants, and values.
Uses natural language processing and custom responses, leveraging real-time and historical customer behavior and purchasing data.
Limits the steps consumers have to take to successfully make a purchase.
Is essential for loyalty and involves:
Another important trend that has become especially obvious of late is disparate consumer behavior based on age.
Download the full report to learn what we discovered about generational shopping habits and more:
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