The newly released annual look at the digital world from online and mobile measurement firm comScore makes it quite clear that retailers better be ...
Platinum members of the Merchant Risk Council lost 1.1% of their web revenue to fraud, compared with 1.4% for all merchants in a new survey by CyberSource Corp.
For the second year in a row, a major retailer survey shows lower online fraud losses for Platinum members of the Merchant Risk Council, which are larger merchants that participate in the council, which is dedicated to making e-commerce more safe and profitable.
The 74 Platinum member retailers among the 400 merchants that participated in the CyberSource Corp. survey last fall reported average fraud losses of 1.1%, compared with 1.4% for the entire sample and 1.3% for large retailers that are not council members, the Merchant Risk Council reported today. Platinum members of the council are online and multichannel retailers with at least $75 million in total sales.
The fraud rate for the Platinum members did move up from last year, when average losses were 0.8%. However, the median-the percentage at which half the sample was above and half below-increased more modestly from 0.45% to 0.50%.
For Platinum MRC members, the percentage of orders that turned out to be fraudulent went up from 0.56% to 1.1%, while for all respondents that rate fell from 1.3% to 1.1%. However, the median for Platinum members held steady at 0.2%, indicating some of the respondents had significantly higher than average loss rates. A third more MRC Platinum members participated in the survey this year, and 18% reported that more than 1% of their orders turned out to be fraudulent, versus 5% last year, according to CyberSource, a provider of payment-processing and risk-management services for online retailers.
In other findings from the report:
- MRC Platinum members rejected 2.4% of orders on suspicion of fraud, versus 2.9% for the overall sample and 2.6% for other large non-member merchants.
- MRC Platinum members rejected 6% of international orders versus 11% for the total sample and 12% for large non-member merchants.
- Platinum members reported 3.2% of international orders turned out to be fraudulent, compared with 4.0% for the overall sample and 3.4% for other large online merchants.
- Platinum members on average use 7.8 automated fraud-screening detection tools, versus 4.7 for the overall sample and 5 for other large non-member retailers.
“This survey shows that even though MRC members are allowing a much greater rate of online orders to be processed, they are actually experiencing a lower rate of overall fraud for both domestic and overseas orders,” says Tom Sullivan, chairman of the MRC, and senior director of Global Payments & Risk for online travel site Expedia Inc. “As merchants continue to look for ways to maximize revenues during tough economic times, accepting more valid international orders can be a great source of growth.”