April 30, 2009, 12:00 AM

With fraud rates stable, merchants reject fewer risky orders

Online retailers are rejecting fewer orders for fear of fraud. But even though fraud rates are stable, e-retailers are investing in security.

After dropping steadily in the early part of the decade, fraud as a percentage of online sales has held steady at 1.4% the last three years, according to the 10th Annual Online Fraud Report from CyberSource Corp. What changed last year was that e-retailers rejected fewer orders for fear of fraud: 2.9% in 2008 versus 4.2% in 2007. Despite approving more purchases, actual fraud was only 1.1% of orders, within the range of 1.0% to 1.3% that’s prevailed for six years. Nonetheless, fraud losses grow with online sales, totaling $4 billion last year, up from $3 billion in 2006, the CyberSource report says. That helps explain why retailers are investing in fighting fraud: 25% say they’ll invest in technology that tracks the digital fingerprint of computers used to commit fraud, 19% in IP geolocation systems, and 18% in case management systems that, for example, show the percent of manually reviewed orders that turn out to be fraudulent.

comments powered by Disqus

Advertisement

Advertisement

Advertisement

From IR Blogs

FPO

Adrien Henni / E-Commerce

Russian's new data law: What e-commerce firms need to know

All personal data must be stored in Russia, and not in cloud servers elsewhere. Here ...

FPO

Anna Kuzmina / E-Commerce

An introduction to online payments in Russia

Russian shoppers use a variety of domestic e-wallets quite often when shopping online, a result ...

Advertisement