Every ecommerce transaction also requires data. If you’re in business-to-consumer (B2C), such as Internet retail and banking, this is where you’re most likely to acquire new customer data. At several points during the interaction, information about the customer is gathered. Customers provide their name, address, email, phone number, and other information when they create an account. Similarly, when a consumer makes a purchase, they must provide information such as their credit card number and personal information such as their phone number or email address. No transaction may be performed without this information. Companies also utilise this information to personalise services and improve client interactions.
Each person’s data contributes to the creation of a unique profile for that person. By checking contact data, such as address, email, and phone number, before completing transactions, this data can be utilised intelligently to detect and prevent ecommerce fraud. Indicators in the data can help organisations identify and prevent fraud, such as obtaining access to ecommerce accounts whilst allowing legal transactions to go through. As a result, it strikes a balance between safeguarding the company’s interests and making purchases simple.
Since the onset of the Covid-19 pandemic, consumer intent to purchase goods through e-commerce channels has increased by 40 to 60 percent compared with prepandemic levels across categories from everyday essentials to clothing and accessories. – McKinsey Digital
Bottomline: Fast growing retail attracts many types of fraud
In just a few years, the pandemic has accelerated digital transformation, with more than 80 percent of customers adopting new shopping habits.
Covid-19 has altered the way we live, work, and shop forever. After several lockdowns over the last two years, consumers have established new online behaviours by overcoming barriers such as creating online accounts, supplying payment information, and establishing confidence. There was a 55 percent increase in buy online pickup in store (BOPIS) fraud attacks.
The great consumer shift
Consumers appreciate how simple it is to buy something online and have it delivered to their homes. However, this has given bad actors and cyber criminals one of the fastest-growing chances to scam digital retailers. But tension produced by fraud prevention can detract from the customer’s experience, and as a result, revenue suffers. It’s crucial to create a balance between the two, and today’s retailers are fortunate to live in a time where technology allows them to do so.
Common types of ecommerce fraud
While the term “ecommerce fraud” is self-explanatory, it refers to a variety of strategies employed by fraudsters to attack ecommerce companies. Fraud is nothing new to bricks-and-mortar retailers, which have been dealing with it for decades. However, because credit cards do not need to be shown for a transaction, ecommerce platforms open up a whole new universe of chances for fraudsters.
Account Fraud
Account fraud happens when a fraudster creates a new account or gains access to an existing account using a fraudulent identity. This can be accomplished through a variety of means, such as a stolen password, security codes, or contact information such as an address, email address, or phone number.
Coupon abuse
When a bad actor takes advantage of a company’s promotional discounts or sign-ups, this is known as coupon abuse. Bad actors may try to scam a company by utilising promotional codes several times, by using disposable emails and phone numbers.
Hidden cost of retail fraud
While the term “ecommerce fraud” is self-explanatory, it refers to a variety of strategies employed by fraudsters to attack ecommerce companies. Fraud is nothing new to bricks-and-mortar retailers, which have been dealing with it for decades. However, because credit cards do not need to be shown for a transaction, ecommerce platforms open up a whole new universe of chances for fraudsters.
Customers demand quick, efficient interactions with retailers, but they also want their names, credit card numbers, and contact data to be safe. It’s difficult to strike a balance between customer experience and security.
Although retailers may strive hard to provide an exceptional customer experience while browsing and purchasing, there are several things that they may be overlooking as part of their overall plan. Consider the unintended consequences of an overly active fraud prevention strategy. Customers may have a negative experience with your brand in one of two ways:
- Speed it up!: The speed with which customers are onboarded is one of the key reasons for customer abandonment. If it takes days or even weeks for your process to determine whether a customer is authorised or denied, they’re likely to go to a competitor who can get them up and running in minutes.
- Minimise errors: Failed and misdirected deliveries occur when the shipping address is incorrect, the delivery driver commits a human error, or the driver fails to arrive within the required time frame. It’s crucial to deliver to the relevant person at the correct address.
Last-mile delivery costs hovered around £1.6 B (US $2 billion) for failed parcel deliveries in the UK.
In our ever-expanding digital environment, fraud is an ever-evolving real-time concern. Retailers can only prevent online fraud by collaborating in the same way that fraudsters do – by devising new and persistent strategies to stay one step ahead of fraud risks. While giving your customers a seamless online shopping experience.
Incorporate robust data validation practices
To be able to validate a customer, you can use various parameters such as the customer’s address, email and phone number. Protecting your business from ecommerce fraud is critical, as is providing a seamless customer experience with an easy-to-use solution that allows you to focus on your business. Experian’s real-time validation solutions combined with world class data, assure data accuracy, and provide extra insights, allowing businesses to identify discrepancies at the point of first contact with a potential customer.
Your business could be crippled if you wait too long to install a fraud prevention solution. Real-time data validation can help as a simple fraud prevention solution. Too many needless features can be costly or create a high level of friction for your customers. It’s often easier to utilise a quick, lightweight solution.
You will know you have struck the sweet spot when you are meeting customer expectations for customer experience while simultaneously building trust with emerging technology.
Adopting simple validation methods can increase customer trust
It is important to meet customer experience expectations, whilst preventing fraud and protecting your business. Contact validation helps ensure you’ve got the right information as part of your lightweight fraud strategy.
It’s entirely up to you whether you use a single contact validation or all three solutions. Learn more about how Experian can assist you with the first line of defence to combat fraud by automating and simplifying your validation processes so that you can have a better customer experience.