Online retailers may bear not just the brunt of the financial damage but also the perceived responsibility when fraudsters target their stores and customers, according to an extensive survey published this month by fraud prevention and e-commerce enablement company Riskified (RSKD). The results reveal that merchants are significantly more confident in their ability to manage fraud than consumers are — and that this gap in e-confidence costs them in customer loyalty.
Consumers say retailers aren’t doing enough to protect them
With e-commerce adoption booming, online fraud is at the forefront of shoppers’ minds. Over a third of surveyed US consumers said they are more apprehensive about online shopping now than they were a year ago. Almost the same percentage, 35%, said they expect to become more worried about falling victim to online fraud within the following year. Over a fifth reported having already been victims of e-commerce fraud in 2020.
When asked, around nine out of 10 US merchants said their company is doing everything it can to stop credit and debit card fraud. But consumers are skeptical. Almost three-quarters of respondents said retailers could, and should, do more to protect them. And in an age of nearly limitless e-commerce options, consumer trust is everything. Reportedly, 25% of shoppers deleted their online accounts after becoming victims of fraud, and 66% said they wouldn’t shop online again at a store that failed to protect them.
The one thing that both merchants and consumers seem to agree on is that online fraud will only worsen. Almost half of US consumers think that going forward, retailers will find it even harder to prevent fraud as bad actors sharpen their tactics and execution. While more confident in their capabilities, merchants agree: Sixty-nine percent still expect fraud attempts to increase over the next year, forcing them to look for long-term solutions to block fraud and retain customer satisfaction and loyalty.
Closing the e-confidence gap
Riskified’s research included 4,000 consumers and 400 e-commerce professionals across the US, UK, France, and Germany. The UK and the US had the largest confidence gap between retailers and their customers of the countries surveyed. So what can merchants do to build consumer trust? To inspire true e-confidence, merchants need to have the ability to mitigate fraud while providing frictionless shopping experiences.
Most merchants will turn, and rightly so, to technology. But too often, fraud prevention measures introduce customer friction. Two-factor authentication, for example, can help defend against fraud but often adds extra steps to the customer journey, leading frustrated customers to abandon their shopping carts and hurting retailers’ bottom line.
At Riskified, we have spent the last eight years building an e-commerce risk management platform that enables online merchants to create trusted relationships with consumers. By leveraging machine learning technology and a global merchant network, our platform accurately identifies the individuals behind online interactions without introducing friction for shoppers. Not only can we help merchants cut down on that 5% to 10% annual revenue loss to fraud, but our products also protect customers from malicious account takeover attacks and combat payment failures at checkout. This allows merchants to block abuse while upholding consumer-friendly policies.
By making e-commerce safe, accessible, and frictionless, our technology creates a prosperous and confident future for consumers and merchants and helps retailers bridge the e-confidence gap.
This post was created by Riskified with Insider Studios.