Guest blog by Jeff Liesendahl
Just think, not that long ago, a security guard positioned at the front door and a video surveillance camera were all merchants needed to protect their businesses.
How times have changed. With the rapid expansion of e-commerce as a profitable and oftentimes preferable way for merchants and customers to transact business, security and fraud prevention are clearly no longer as simple as a guard manning the front door.
Increasingly, merchants are realizing that finding the right balance of protection that enables fulfillment of legitimate customer orders while also flagging fraudulent ones can be a difficult task. Although too little protection can open the door to fraudsters, too much can frustrate customers to such an extent that they take their business elsewhere. As a result, finding the right level of fraud prevention has become core to merchant security efforts.
Accertify recently commissioned a study of U.S. consumers to see how people perceive and react to online fraud. We found that 28 percent of the American consumers surveyed have encountered a fraud protection system that unnecessarily delayed or denied their transaction. These results confirm what we’ve seen more and more in our own business: merchants falling victim to the misconception that overly rigorous fraud solutions are best for their business.
As consumers told us in our study, less is more. Interestingly, while being inconvenienced by a delayed or denied transaction may seem to be a minor nuisance, it’s actually a huge customer service issue. According to our research, consumers are less willing to give merchants a second chance after an experience like this, and frequently will take their business elsewhere.
More than 35 percent who reported encountering a delayed or denied transaction said they would penalize the business responsible by moving or consider moving their business to a competitor, while 11 percent immediately fled for competitors.
To protect against fraud while avoiding customer dissatisfaction, fraud prevention should be considered on a case-by-case basis, because not every business is subject to the same risks. With that in mind, a customizable platform that can be adjusted easily based on a business’ various sales channels, product offerings and other industry-specific risks will not only reduce the resources necessary to manage in-house programs, but also increase the speed and efficiency of the review process.
As consumers continue to flock to online payment channels, it is becoming increasingly apparent that they value the security of online transactions. Therefore, it is more important today than ever for merchants to have an effective yet balanced fraud prevention solution in place.
Although no fraud prevention solution fits all sizes, it is critical for the customer experience that merchants implement a flexible, customizable platform tailored to their specific business needs.
Jeff Liesendahl is president of Accertify, an American Express company. For more information, visit www.accertify.com.
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