As the tactics fraudsters use become more advanced, they are getting better at making fraudulent orders appear legitimate. In an effort to keep up with them, however, merchants’ antifraud systems can sometimes mistake a good order for fraud. Canceling a good order can have a ripple effect on a business, but can be difficult to measure or prevent, according to a panel of experts in a session on the final day of the 2016 CNP Expo. The panel discussed false positives, how to measure them and how to reduce the negative impact they have on future sales and on a retailer’s customers.
According to Mike Gross, director of risk strategy and professional services at information and analytics firm Experian, tracking customer service calls after an order has been canceled is a good start. But, merchants should also look at the identifiers associated with the order that prompted the call to determine if other customers who did not reach out were impacted. Re-examining and adjusting rule sets to not cancel these orders in the future can be a way to prevent cancellation of similar transactions.
All of the panelists stressed that it is up to merchant to find a balance between not impacting good customers and keeping the bad guys from making fraudulent purchases. Aaron Press, director of market Planning, e-commerce and payments at LexisNexis Risk Solutions noted “it’s possible to have near zero fraud.”
But, added Shawn Hall, director of strategy and fraud prevention at Pindrop “it’s up to you to determine how much risk versus how much resources you’re willing to put into your business.”