December 8, 2005, 12:00 AM

CompactAppliance.com cuts fraudulent order rate 10%

After implementing a credit card verification code system, which is designed to prove that online buyers have their payment card in hand, retailer CompactAppliance.com has cut its number of fraudulent orders by about 10%, it says.

After implementing a credit card verification code system, which is designed to prove that online buyers have their payment card in hand instead of just an account number, retailer CompactAppliance.com has cut its number of fraudulent orders by about 10%, Jason Roussos, vice president of business development, tells InternetRetailer.com.

“The biggest percent of fraud tends to be from people who have a credit card account number and an address of the cardholder, but most of the time they don’t have the credit card in hand,” Roussos says. “So we changed our shopping cart to require that card verification code. That’s really helped.” The retailer`s number of fraudulent orders represent less than 1% of total orders, he adds.

Under the card verification code system, Visa, MasterCard, American Express and other credit card companies print a 3- or 4-digit number on the front or back of a credit card. The number is unique to each credit card account and designed to prevent thieves from using stolen account numbers.

CompactAppliance.com is No. 281 in the Internet Retailer Top 400 Guide to Retail Web Sites, with $11 million in 2004 sales. Year-to-date sales are up about 45% over last year, Roussos says.

 

 

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