The number of both fraud attacks and false declines is growing. Are you working on preventing false declines? Do you have a secure payment processor to rely on? Not sure? No worries! This article will help you with preventing false declines easily.
Preventing False Declines
Let’s start with the so-called “friendly fraud.” It’s to do with cardholders wrongly disputing purchases made by themselves or someone else in their family. The bad news is that friendly fraud has made false declines grow to a huge extent.
What about these false declines? Well, they’re also called “false positives” and represent valid transactions that issuers and merchants wrongly reject as fraudulent.
Overall, if you want to avoid facing problems while growing your e-commerce business, you must invest in the customer experience from the very start. Here, it’s critical to never leave the checkout experience in ignorance.
Specifically, you need to work on improving the process by optimizing the omnichannel experience. Next, it’s important to provide a variety of payment methods and use artificial intelligence (AI) for the automation of the basic steps concerning the buying experience.
The growth of fraud and false declines has created several challenges for the market, thus making e-commerce merchants turn to layered fraud solutions more often than in the past so to enjoy loss reduction.
In fact, these false declines are away from being low cost. Why? The thing is that they not only result in financial issues but also in deteriorated relationships with your customers at risk. Let’s look at some numbers:
- As of 2018, 30% of rejected orders didn’t deal with fraud.
- According to a 2018 “True Cost of Fraud Survey” by LexisNexis, false decline rates accounted for 18% – 28%, based on the size of the merchant and the type of products offered.
- In 2018, according to Aite Group, $331 billion in CNP orders were falsely declined in the U.S. alone.
- A 2017 survey shows that merchants declined 2.6% of all e-commerce orders because of suspected fraud. For orders accounting for over $100, the declined transaction rate because of fear of fraud was 3.1%.
What are you doing to fight fraud? Are you working with a trustworthy merchant services provider that can help you with this? If not, it’s high time you turned to a reputable payment processor like eMerchantBroker.com. EMB, the top-rated high risk credit card processor and a respectable alternative online lender in the U.S., provides unique solutions for preventing false declines.
The cooperation with Verifi and Ethoca has enabled eMerchantBroker.com to provide exceptional services to combat fraud and mitigate chargebacks easily. The BBB lists EMB as an A+ company, and Card Payment Options as an A company. Besides, ValuePenguin considers EMB the “Best All-Around High Risk Merchant Account Provider.”
The Negative Impact of False Positives: How to Avoid It
False declines hurt e-commerce businesses in more than one way. When customers are notified about a declined transaction, they fall into frustration. So:
- False declines can make your best customers choose your competitors
- They can hurt your company’s reputation
- They can make customers publicly criticize your company’s fraud detection capabilities
What about the causes behind false positives? Well, false declines are mainly caused by the fact that merchants rely too much on the basic fraud filters that often make part of e-commerce platforms or payment gateways.
Instead, it’s important to also rely on your expertise to accurately identify fraudulent transactions instead of being merely focused on these fraud filters for fraud detection.
You might be wondering how you can reduce false declines, aren’t you? The 1st step is to analyze your store’s declines to find out the cases of true fraud and those declined wrongfully. Next, search for methods that’ll allow you to double-check orders flagged for fraud before they’re declined.
It’s important to change your attitude towards fraud prevention to enjoy increased revenue, higher customer lifetime value, and a better customer experience.
To sum up, losing money to fraudsters is among the top challenges e-commerce merchants face. So, it’s vitally important to be able to fight fraud effectively. For this, a collaborative approach between card issuers and you is immensely helpful. By sharing data, you both can better distinguish between fraudulent and legitimate cardholders.