Online Fraud Continues to Hurt eRetailers

With Internet Marketing Magazine’s sister Marketing Agency we work with growing many eCommerce stores. One of the big trends that we’ve noticed especially in the last 12-24 months has been the rise of online fraud.

Internet Fraud

The most common online fraud we see is the use of stolen credit cards to purchase high value re-sellable items like consumer electronics.

CyberSource, a unit of Visa recently said in its annual report that retailers revenue that was online fraud increased over the past two years to reach an esti- mated $3.5 billion in 2012. This figure has risen 30% since 2010.

International online orders also have a higher fraud rate, the report says. For the 54% of survey respondents who accept international online orders, the fraud rate last year for orders placed outside of North America was 1.6%, twice the overall e-commerce fraudulent rate of 0.8%.

eCommerce retailers now have a wide range of tools available to them to help detect fraud. These include software that predicts the likelihood of a transaction being fraudulent; known stolen credit card databases; order velocity checking and manual methods such as contacting credit card owners.

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