Overcoming False Positives: Saving the Sale and the Customer Relationship
- Date:September 21, 2015
- Author(s):
- Test
- Kyle Marchini
- Aleia Van Dyke
- Research Topic(s):
- Fraud Management
- Tech & Infrastructure
- Fraud & Security
- PAID CONTENT
Overview
Merchants face a serious challenge in today’s marketplace as they try to balance the need for strong antifraud measures with consumers’ desire for fast, easy, and digital purchases. Quite often, security measures incorrectly flag legitimate transactions, which potentially alienate customers and result in reduced revenue for merchants.
One in six (15%) of all legitimate cardholders experienced at least one decline because of suspected fraud in the past year, resulting in a total of $118 billion declined. Unfortunately for merchants, 26% of declined cardholders reduced their patronage of a merchant following a decline and 32% stopped shopping with the merchant entirely.
This whitepaper, sponsored by Riskified, analyzes the prevalence of false-positive declines in the U.S., explores key consumer segments disproportionately affected by incorrect declines, and presents best-practice solutions for merchants. The whitepaper was independently produced by JAVELIN.
Sponsored by:
Methodology
METHODOLOGY
The consumer data in this report is based primarily on information collected in a random-sample panel of 3,200 consumers in a November 2014 online survey. The margin of sampling error is ±1.65% at the 95% confidence level. Javelin targeted respondents based on proportions of gender, age, and income representative of those of the overall U.S. population.
Market Sizing
The false-positive market sizing is derived though survey results, Javelin industry analysis of reported means and frequencies, regularly revised U.S. Census population data, and Javelin’s previously published POS, online, and mobile proximity purchasing forecasts.
Learn More About This Report & Javelin
Related content
Social Security Administration Anti-Fraud Changes Are an Important Lesson for Financial Institutions
Financial institutions can learn much about what not to do from the recent anti-fraud changes at the Social Security Administration. When making procedural changes that directly af...
2025 Identity Fraud Study: Breaking Barriers to Innovation
The Javelin Strategy & Research 2025 Identity Fraud Study provides a comprehensive analysis of fraud trends amid a changing landscape for technology and payments. Its goal is to in...
Battle of the Budget: Prioritizing Scam Classification for Future Cost Savings
In the fight against ever more sophisticated and complex scams, financial institutions are hamstrung in various ways, chiefly by their own priorities: They give a bigger budgetary ...
Make informed decisions in a digital financial world