Riskified Publishes False Declines Research

BOSTON, Massachusetts, September 28, 2015 /PRNewswire/ --

Riskified, a venture-backed fraud prevention solution provider for eCommerce merchants, announced today the publication of 'Overcoming False Positives - Saving the Sales and the Customer Relationship', a white paper for retailers.

Commissioned by Riskified and conducted by Javelin, the white paper sheds light on the scope of false positive declines - namely how often merchants wrongly reject legitimate transactions due to fear of fraud. Moreover, it provides insights into which consumers are disproportionately declined by retailers, and how experiencing a false positive decline affects their behavior.

Javelin's research, including a survey of 3,200 US consumers, suggests retailers may be losing more to fear of fraud than they lose to actual fraud. The percentage of consumers affected by false-positive declines is three times greater than the percentage affected by card fraud, with a total of $118 billion incorrectly declined in 2014, compared to just $9 billion lost to card fraud.

"A key lesson in today's shopping environment is that validation of personally identifiable information, like name, social security numbers, or CVV is insufficient, because this information is static and widely available to fraudsters," says Al Pascual, Director Fraud & Security at Javelin.  "The solution lies in authorizing transactions based on dynamic information, such as referring site, browsing patterns, and use of proxies. To avoid false positive declines, we recommend adopting a holistic approach that attempts to understand the complete picture of the purchaser in context of the specific order."

While previous surveys have showed merchants believe their declines to be highly accurate, Javelin found that 1 in every 6 legitimate cardholders (equivalent to 15%) had experienced a false positive decline in the past year. Young adult cardholders and high-income customers were found to be at a higher risk of being declined. Unfortunately, younger consumers are also more likely to switch merchants after a decline, with 42% abandoning a merchant after their transaction did not go through.

"Retailers tend to underestimate the impact fraud prevention measures may have on customer experience," says Eido Gal, CEO & cofounder at Riskified. "This research provides a clear picture of the business impact of false declines. Overly risk-averse fraud prevention policies result not only in merchants leaving money on the table, but also erode consumer trust and loyalty."

The white paper is available for download here. Riskified is holding a digital discussion about the research findings next week. If you're interested to learn more about the consumer impact of false positive declines and want to learn best practices for reducing them, register for the webinar!

About Riskified 

Riskified (http://www.riskified.com) is a leading eCommerce fraud management solution trusted by hundreds of brands across the world. Headquartered in Tel Aviv with offices in the US, Riskified utilizes machine learning models, behavioral analytics, device fingerprinting and other fraud detection methodologies to accurately analyze and approve eCommerce orders. Thanks to the exceptional accuracy of its fraud review process, Riskified can identify and prevent fraud while ensuring good customers are not turned away. With full chargeback insurance on approved orders and a pay-for-performance model, Riskified is an economical and effective solution that helps merchants fight fraud and improve their top- and bottom-line sales.

Contact:
Andy Freedman
Tel: +1-617-290-8179
[email protected]

SOURCE Riskified