Page 28 - Cyber Defense eMagazine - December 2017

Change your fraud prevention focus

Since the percentage of all orders which are fraudulent drop during this time, online
merchants face a higher risk of turning down legit orders unless they adjust their fraud

prevention systems. Declined legit orders mean lost revenue, not only for that particular
order, but also any future online orders which will now be diverted to your competitors

because your crude fraud filter seriously dampened that shopper’s holiday spirits by

mis-labeling them as a criminal. This is precisely why many etailers are switching to
more advanced e-commerce fraud protection solutions, like the machine learning-based

service offered by Riskified.

Not only is there a danger in overreacting to the actual fraud risk, e-commerce
companies can also make costly mistakes when it comes to manual review of

suspicious orders. The huge surge of shoppers during this time results in a large
volume of orders which need to be manually reviewed by analysts who then accept or

decline the order. This in turn forces online merchants to add seasonal hires to their

fraud review team as well as increase the workload on permanent staff, both of which
can result in inaccurate, rushed decisions (especially if the seasonal hires are new to

fraud prevention).

Help bring joy to the world: don’t falsely decline international orders

Rushed decisions and fear of chargebacks often result in more false declines and thus

lost revenue. What compounds this problem of false declines during the holiday
shopping season is not only the already discussed quantity of orders, but also their

quality, because perfectly legitimate holiday e-commerce shopping can have one or

more indications of a fraudulent order.

One of these is a mismatch between the billing address of the card used and the

shipping address of the gift, which can indicate a fraudulent order. It can also indicate,

however, a consumer shopping for friends or family and choosing to have the

28 Cyber Defense eMagazine – December 2017 Edition
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