Why Online Retailers are Unprepared for Fraud this Holiday Season
Year after year, there has been an increase in online shopping over the holiday season. It is predicted that this year will be no different
Parallel to online sales increasing, mobile fraud is also on the rise. The COO of Chargebacks911®, Monica Eaton, discusses the threats ecommerce merchants are facing and what they can do to protect themselves this holiday season.
With the holiday shopping season nearly upon us, online merchants need to be proactive in implementing strategies that will ensure maximum profitability,” said Monica Eaton, co-founder and chief operating officer of Chargebacks911. “However, boosting sales is only part of the equation; it’s equally critical to protect against losses.”
It has been noted that 38% of ecommerce merchants are not prepared for the holiday season, and as Eaton reiterates, it is vital companies look at proactive ways to protect their profits.
Fraud prevention measures should be an essential component of retailers’ pre-holiday preparations, especially since online and mobile channel fraud continues to grow.”
In order to protect their profits, merchants must employ an effect risk management strategy to minimize the threat of fraudulent transactions, in particular friendly fraud.
Friendly fraud is the hidden threat within the card-not-present world, with over 86% of chargebacks being filed fraudulently. When a consumer files an illegitimate chargeback against the merchant, the merchant suffers a number of financial losses that could be prevented.
Often referred to as “friendly fraud,” this form of online shoplifting places the burden of proof on merchants and can result in lost sales, merchandise and shipping/handling costs in addition to chargeback fees.”
