April 29, 2011, 12:45 PM

E-retailers cut their fraud losses

Online retailers reduce their fraud losses.

Internet Retailer

E-commerce sales in the U.S. and Canada rose 10% last year from 2009, to $300 billion, according to figures compiled by CyberSource Corp. that include transactions at government, education and not-for-profit organizations as well as online retail sales of consumer products, event tickets and travel services. But related losses from online fraud fell below $3 billon for the first time since 2005, CyberSource says in its 2011 Online Fraud Report. The $2.7 billion lost to online fraud last year was 0.9% of online revenue, down from $3.3 billion or 1.2% in 2009 and from $2.8 billion or 1.6% or in 2005. Merchants are rejecting more suspicious orders, at a rate of 2.7% in 2010, up from 2.4% in 2009. And in several consumer products categories, retailers rejected orders at significantly higher rates. Consumer electronics e-retailers rejected orders at the highest rate, 5.9%, but that was down from 6.6% in 2009. The study also notes that merchants contested 55% of their chargebacks in 2010, winning 41% of the cases.

Comments | 1 Response

  • Considering that non-payment/delivery of goods sold or bought—whether from online auctions or not—is the most common cybercrime as reported to the IC3 in 2010, and by all accounts occurs about 25,000 times each month, it is not surprising then that you can, whether as seller, or buyer, easily be scammed. However, you can protect yourself. A very good friend of mine was seriously scammed late last year and has since done extensive research into how you defend yourself against scammers and fraudsters. She reports that she found the solution. These days she INSISTS on using a legitimate online escrow service for transactions of value. It's amazing, she tells me, how fast the scammers scramble for the hills when you refuse to listen to reasons why you shouldn't use this service (bona fide) but instead use another (fraudulent). It's like a litmus test, she says, it really exposes the scammers. Her new motto is: When in doubt--escrow. She swears by it. But, how do you tell the legitimate escrow site from the fraudulent? First of all, the legitimate site is always secure, and therefore will display “https” (for secure http) on your browser’s URL line. If the site does not, abandon it. Also, the legitimate site will post a physical address and a working phone number, allowing you to talk directly to the staff. The legitimate site will always display their licenses and accreditations, which you can then verify with the applicable state(s), and they can and will, on request, give you names and contacts of satisfied customers, whom you can then call to verify legitimacy.

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