Previously we described the varieties of e-commerce fraud businesses face in our blog, Combating the Seven Types of E-commerce Fraud. But you might be surprised to discover one of the biggest things that get stolen in retail fraud: your reputation.
A recent article in CPO Magazine explored a little-discussed but important topic: how consumers perceive you when they are the victims of fraud. Their conclusion: victims are much more likely to blame the retailer than the fraudster when bad things happen. Citing a global survey from Riskified, here are some of the numbers behind this conclusion:
- An amazing 49% of Americans have been victims of credit card fraud, 22% in the past year alone.
- While a third of victims blame the perpetrator, 40% of victims blame the retailer.
- 71% of Americans feel merchants could do more to stop fraud, but only a third of respondents trust their ability to do so.
Simply put, one of the biggest things that fraudsters steal is your reputation capital. Another way to frame it is that even small fraud losses could cost you a lifetime customer revenue stream in the future. This is why, in a real sense, the psychology of managing fraud can be as important as its technology.
Where fraud and trust intersect
In chess, good strategy involves thinking several moves ahead. With fraud prevention, it is much the same – except that you are balancing a dual mission of keeping the fraudsters away and building trust among your customers. Here are some of the things you can do to manage fraud from a customer perception standpoint:
Have a strong anti-fraud infrastructure. It goes without saying that the best way to address consumer perceptions of fraud is to prevent fraud. Most companies need to have an automated process in place to check for obvious red flags such as inconsistent or bogus contact data, large orders from new customers, high-risk origins and destinations – and a process in place for reviewing suspicious orders.
Promote your security practices. It isn’t enough to simply try and prevent fraud – the job isn’t finished until customers know what you are doing to protect them. So fraud prevention isn’t just a set of procedures: it is a selling point and marketing tool.
(P.S. What are our own security practices? Glad you asked. We are very proud of the bank-grade security and airtight practices we use to protect our customer data, and this web page discusses them in detail.)
Manage your overall reputation and market presence. Let’s say you are making a major purchase, such as an automobile or a large investment. Would you purchase this from a dingy storefront in a sketchy neighborhood, or a gleaming new showroom? It is much the same decision-making process when e-commerce consumers decide where to hand over their credit card data and personal info. Your web presence, digital footprint, secure checkout and online reviews all speak to your customers, their perceptions of your business and whether they choose to do business with you.
Fight fraud with data validation
Service Objects provides API-based tools that automate flagging suspicious transactions, to help you prevent fraud before it starts. Our Fraud Solutions web page gives an overview of the options we offer, but a here are few of our most popular ones:
Lead Validation: This bundled service cross-validates, corrects and scores over 130 key data points to help your business more accurately identify quality for leads and customers worldwide, providing a quantitative confidence score from 0 to 100 as well as detailed reporting on common red flags for fraud.
Address Validation: Whether you are shipping domestically or internationally, ship intelligently. Common fraud practices will use PO boxes, vacant lots and other general delivery like addresses to receive products. Our address validation services identify these types of domestic and international addresses so they can be flagged for review.
Email Validation: Email Validation performs over 50 email address verification tests and determines authenticity, accuracy, and deliverability, helping identify commonly used fraud email strategies like bogus and disposable accounts.
In addition, our flagship contact data validation tools help you validate accuracy and deliverability for all of your lead and customer touch points. To explore what solutions work best for you, or to arrange a no-obligation trial with a free license key, contact our friendly product experts any time.
