The holiday season provides a good incentive to consider many important aspects of an ecommerce operation that may be overlooked during the rest of the year. An excellent one to keep in mind is fraud protection, particularly for fashion brands. If your online business doesn’t have any risk or fraud management strategies in place, it is a good idea to invest in this before the holiday rush.
The danger of fraud is present for any retailer and, without a solid mitigation plan, can become a serious problem no matter how large your operation is. Within the ecommerce industry, the amount of revenue lost annually to payment fraud is nearly 1% (according to the 2014 MRC Global Fraud Survey) and unfortunately fashion brands, with their high-value goods, are especially susceptible. Fraud can easily spiral out of control, because once a fraudster gets away with it on your site, they’ll try to strike again. Often times, fashion brands and other small operations attempt to handle fraud manually. If suspicious activity arises on the site, the review team may flag it and decide whether or not to deny the transaction.
However, during the rush of the holidays, this type of system quickly becomes unmanageable. With the dramatic increase in traffic and transactions, manual methods can quickly become overloaded. Fraudsters know this. They are well aware that the holiday season presents a higher volume of transactions for merchants, and therefore a higher chance that retailers will miss a fraudulent one. Not only that, there is also the important risk of false positives, which accidentally deny safe sales and alienate good customers. This is hurtful to your brand’s reputation among shoppers, a loss that is harder to recover from.
Fraud management SaaS services offer a great solution, and one that can be implemented in time for the holiday season. Solution providers can handle these transactions automatically, cutting down on time spent manually reviewing orders. They can also help to eliminate false positives, and some, like Riskified, even eliminate chargeback risk for retailers. When you factor in the potential revenue that can be lost to fraud, a risk management solution is worth the cost. According to a recent report, the fraud market is expected to grow to reach approximately $18.5 billion by 2018 in the US.
The time to begin this process is now. Many ecommerce retailers freeze development in the fourth quarter, which is an excellent way to avoid bugs and support issues during the holidays. But this leaves just a couple months to set up any fraud protection tools, data sources or solution providers in time for this critical sales season. Ecommerce fraud attacks in Q2 of this year rose 20% over Q1, according to the ThreatMatrix Cyber Crime Report. Get ahead of the rise in fraud and implement a strategy. The holiday’s are a joyous time, so don’t let fraudsters ruin the magic.
Header image via Flickr
Susan Nordquist is Solutions Engineer at Corra, a New York, Los Angeles and London based digital commerce agency creating unified commerce experiences for fashion, lifestyle and beauty. With a team of 100+ ecommerce strategy, design and technology professionals, Corra delivers rich shopping and buying experiences across all channels and devices. Corra is trusted by retailers of all sizes to implement and support Magento Enterprise, Demandware and hybris platforms.