You want to give your customers an experience that keeps them coming back for more. Unfortunately, you also have to think about the bad actors who might be hiding among your legitimate customers.
After all, for every $1 of fraud from chargebacks, e-commerce merchants spend $4 to fight it, and it adds up dramatically over time.
The trick is to find the right balance between customer experience and fraud prevention. Here's a look at why you need the right balance. Plus, we'll guide you through how to practice strong fraud compliance and prevention without sacrificing customer experience.
There are countless different types of e-commerce fraud. Merchants most often see three of them:
Of the three, the most common is chargeback fraud. In chargeback fraud, someone makes an online purchase and requests a chargeback on the item, claiming the charge was fraudulent or invalid. That leaves the retailer with less inventory and no sales to show for it.
Unfortunately, this type of fraud can be hard to spot. Legitimate customers dispute fraudulent credit card charges all the time. That makes it an even more costly form of fraud for retailers who have to differentiate between legitimate chargebacks and fraudulent activity.
Customers have sent clear messages to businesses: customer experience is everything. The entire Internet is available with a few clicks and typed letters. These days, customers value convenience and experience.
The entire Internet is available with a few clicks and typed letters. These days, customers value convenience and experience.
Here's the thing: bad actors also take advantage of the frictionless online shopping environment. It's easy for them to blend in with a shopping experience designed for minimal obstruction, and because companies can only prevent fraudulent methods once those methods are discovered, some criminals can slip under the radar for a while.
Ultimately, it comes down to the best possible balance for your business. You need a great customer experience to keep your customers loyal. But you also need a profitable business model that won't lose money to fraud. A good balance of fraud compliance and customer experience will give you the best of both worlds.
Fighting fraud starts with prevention. And one of the best ways to spot fraudulent behavior early is to take advantage of fraud detection solutions.
These are solutions designed to identify potentially fraudulent behavior in its early stages without impeding on the customer experience. The solutions alert you if they identify red flags, and other customers are able to carry on their business.
Here at Vesta, we understand the power of fraud compliance and prevention. And we're here to make it easy for e-commerce merchants to protect their businesses, with scalable fraud solutions that go beyond prevention. We focus on revenue, not just risk. That means we can help you take a smarter approach to run your business rather than just defending it.