60% of Marketers Unaware of Cost of Fraud in Their Organization
Dec. 29, 2014
Grappling with the increased volume the holiday season brings while maintaining a strong defense against fraudulent orders has always been a precarious balancing act. Knowing how much impact fraud has on your bottom line would seem like a good starting point, but 60 percent of marketers for omnichannel retailers are unsure of how much fraud costs their organization, according to a new report from 41st Parameter. " Holiday Marketing and Fraud " shows that a basic lack of understanding on the part of marketers regarding fraud and the increased money they spend on customer acquisition during the holidays can work against one another.
"While marketers are spending hundreds on customer acquisitions, fraud prevention is undercutting those efforts. Indeed, the real number of Card Not Present declines—the ones most vexing for online merchants—is 15 percent, far higher than most marketers imagined. In the US this works out to approximately $40 billion in declined sales annually. While many of these transactions are blocked for valid reasons, nearly three percent or $1.2 billion are not for valid reasons. During the holiday season, with increased revenue expectations, that three percent can be especially costly."