Amid ongoing fraud concerns in eCommerce, advanced, data-driven prevention strategies can be crucial for protecting shoppers and enhancing their retail experiences, driving loyalty.
PYMNTS’ Q1 eBook, “The Implications of Uncertainty,” features insights from 18 payments industry executives focused on how data can help firms navigate unpredictable times.
Bryan Lewis, CEO of Intellicheck, noted in the eBook that the rise of fraud requires “next-gen” prevention strategies. These include verification using “authoritative data sources,” harnessing behavior analytics, referencing “passive datasets” that go beyond the information that users are actively inputting and “building data consortiums.”
By implementing such strategies, Lewis said, “you protect your customer base, which creates more customer loyalty.”
Indeed, consumers confirm that trust can be key to determining which merchants they shop with, per the PYMNTS Intelligence report “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” created in collaboration with Adobe. The study, which drew from a survey of more than 3,500 U.S. consumers, revealed that three-quarters of respondents consider trust to be a pivotal factor in their choice of eCommerce merchant.
Moreover, findings from PYMNTS Intelligence’s 2022 report “Satisfaction In The Age Of eCommerce: How Build Customer Loyalty Trust Helps Online Merchants Build Customer Loyalty,” created in collaboration with Riskified, showed that 41% of consumers would be very or extremely likely to switch out from a retail merchant if they lost trust in that merchant. Another 48% would be somewhat or slightly likely to do so.
Effective fraud prevention strategies reassure consumers that their personal and financial information is secure. When customers feel protected, they are more likely to trust the retailer and return for future purchases. Plus, retailers known for robust security measures often build a positive reputation. Consumers are likely to be more loyal to brands they perceive as trustworthy and responsible.
Moreover, effective fraud detection can also mean quick resolution of any issues that do arise. Prompt and efficient customer support in handling fraud-related concerns can strengthen customer loyalty.
Sticking the Landing
On the flip side, if fraud prevention strategies are not carefully chosen and implemented, their presence could negatively impact consumer loyalty. Overly aggressive fraud prevention systems can sometimes flag legitimate transactions as fraudulent. This can cause inconvenience and frustration for customers, leading to a negative perception of the retailer.
Many retailers believe this is a key issue. The 2023 PYMNTS Intelligence study “Fraud Management, False Declines and Improved Profitability,” created in collaboration with Nuvei, drew on insights from a survey of 300 executives from eCommerce firms generating annual revenues of more than $100 million who have deep knowledge of their company’s payments systems. The report found that 43% of retailers think false declines have a very or extremely negative impact on customer satisfaction.
Plus, if fraud prevention measures are too cumbersome, requiring multiple verification steps, customers might find the checkout process frustrating and time-consuming, deterring repeat business. “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces” report found that 50% of consumers consider how easy a merchant’s checkout process is when deciding where to shop.