November 5, 2012, 9:36 AM

Fraud hits large online retailers hard

As online retailers grow, so does the threat that online fraud poses to their businesses.

On average, large e-retailers—those with $50 million or more in annual sales—lose $219 per fraudulent transaction, 82.5% more than $120 per transaction loss average across all online merchants, according to a recent survey of 1,030 U.S. e-retailers by LexisNexis, a provider of legal and business information services. That may be because large retailers often sell high-ticket items, which makes them less likely to automatically flag high-value transactions for further review, LexisNexis says. But it may also be that many of those retailers lag in adoption of several tools that can combat fraud, such as IP geolocation, which helps identify the location of the customer placing an order. For more on fraud-fighting tools, see page 41.

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