[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.the-future-of-commerce.com\/2024\/06\/06\/ecommerce-fraud-risks-false-declines\/#BlogPosting","mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2024\/06\/06\/ecommerce-fraud-risks-false-declines\/","headline":"Ecommerce fraud risks: Preventing false declines for social shoppers","name":"Ecommerce fraud risks: Preventing false declines for social shoppers","description":"To make the most of social commerce, brands need to prevent the rejection of orders based on the suspicion of ecommerce fraud.","datePublished":"2024-06-06","dateModified":"2024-06-05","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/contributor\/rick-sunzeri\/#Person","name":"Rick Sunzeri","url":"https:\/\/www.the-future-of-commerce.com\/contributor\/rick-sunzeri\/","identifier":820,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/8e35233b9f3c47acf9b7fb2dff34c09e2b753ea02bc457e4aebb5711ee19188c?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/8e35233b9f3c47acf9b7fb2dff34c09e2b753ea02bc457e4aebb5711ee19188c?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"The Future of Commerce","logo":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","width":172,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2024\/06\/Ecommerce-fraud_FTR-2.jpg","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2024\/06\/Ecommerce-fraud_FTR-2.jpg","height":375,"width":1200},"url":"https:\/\/www.the-future-of-commerce.com\/2024\/06\/06\/ecommerce-fraud-risks-false-declines\/","about":["B2C Commerce",{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/commerce\/","name":"Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Commerce","http:\/\/www.wikidata.org\/entity\/Q26643"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/customer-experience\/customer-experience-general\/","name":"Customer Experience","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Customer_experience","http:\/\/www.wikidata.org\/entity\/Q984142"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/e-commerce-solution\/e-commerce-general\/","name":"E-Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/E-commerce","http:\/\/www.wikidata.org\/entity\/Q484847"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/commerce\/e-commerce\/","name":"E-Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/E-commerce","http:\/\/www.wikidata.org\/entity\/Q484847"]},"High Tech",{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/retail\/","name":"Retail","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Retail","http:\/\/www.wikidata.org\/entity\/Q126793"]},"Retail Industry","Retail Trends, Data, News",{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/marketing\/social-media\/","name":"Social Media","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Social_media","http:\/\/www.wikidata.org\/entity\/Q202833"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/uncategorized\/","name":"Uncategorized","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Categorization","http:\/\/www.wikidata.org\/entity\/Q5884621"]}],"wordCount":1074,"keywords":["B2C E-commerce","E-commerce","E-commerce Customer Experience","Retail Fraud","Social Commerce","Social Media"],"articleBody":"With the rise of social commerce and influencer marketing, e-commerce businesses are increasingly reliant on social media platforms for driving sales. This trend comes with ecommerce fraud risks, including the risk of false declines, which damage customer experience.Among online shoppers age 18 or older in five countries, more than half placed orders on social media at least some of the time over the past 12 months, according to ClearSale\u2019s most recent survey of consumer attitudes on e-commerce, fraud, and customer experience.Many of these consumers use social media to follow influencers for their recommendations on clothing, beauty, home goods, electronics, and more. Nearly three-quarters of Gen Z online shoppers use social media to research purchasing decisions, in part because they tend to trust influencers more than other sources of information.But social commerce transactions can be vulnerable to false declines \u2013 good orders rejected on suspicion of fraud. This happens by mistake, often due to rigid or poorly tuned fraud screening parameters. False declines alienate customers, damage brand reputations, and represent lost revenue and customer lifetime value. Brands that want to make the most of their social commerce initiatives need strategies to prevent false declines without incurring higher rates of fraud.Ecommerce fraud and false declines: Stats and impactFalse declines are a particular risk during live shopping streams and during product drops, when demand is immediate. Order approval can quickly bog down, and shoppers are already online to vent frustration about any problems they encounter.False declines are a more common experience than fraud for most consumers. In the consumer attitudes survey, 13% of online shoppers reported a fraud experience with social commerce during the past 12 months. During the same time, 27% experienced at least one decline while shopping online.Both fraud and false declines have lasting impacts on brands, the survey found:84% of shoppers will boycott a brand after a fraud experience on the brand\u2019s website.42% will boycott a brand after a false decline34% will also complain about the brand on social media.Influencers, naturally, are unlikely to want to work with brands that earn frequent complaints about rejected orders.5 strategies for false decline prevention\u00a0Preventing false declines and approving more good social orders creates a virtuous cycle. When transactions go smoothly, your customers get the items they want, which can increase their positive feelings about your brand and drive loyalty.Successful purchases can also give them \u201cbragging rights\u201d if they\u2019ve scooped up a hot item they want to show off to their followers, which creates buzz for your brand that can attract new customers. Here\u2019s how to start and maintain the cycle:Benchmark ecommerce fraud and false decline rates in each market, by platform. Understand the scope of the problem. If your fraud prevention tools don\u2019t identify false declines–and many don\u2019t–do a retrospective analysis of a few batches of past declined orders to see which were actually good. Use that data to calculate your own false decline benchmark. Breaking the data down by platform and geography will help you in the next step.Tailor fraud screening rules for each market and platform. Consumers tend to have slightly different profiles from market to market, and your fraud scoring rules should reflect that. For example, in a more mature market, a brand-new email address and social account might be a bigger red flag for synthetic identity fraud. In an emerging market, however, scoring too heavily against new accounts could turn away many new potential customers. The same principle applies to platforms, as consumer and fraudster behavior may vary from one to the next.Back up automated fraud scores with real-time expert review. Relying on automated decisioning often leads to false declines. A safer option is to send flagged orders for immediate expert review. This can identify good orders without increasing fraud rates, and it can prevent order-approval slowdowns that frustrate customers.Follow up immediately on customer complaints. Your brand\u2019s social media and customer service teams should have a defined process for responding to complaints shared by customers. They, and other potential customers, will be watching to see how you handle problems, so quick and appropriate resolutions are critical.Track fraud, false decline, and customer complaint data over time. Ideally, you\u2019ll see all three drop or remain low as you put the above steps into place. And if they don\u2019t, you\u2019ll have data you can analyze to identify the problem.      TikTok search tops Google for Generation Z                TikTok is replacing Google as the preferred search engine for Generation Z. How can brands get in on this hot organic search trend?      Ecommerce fraud and social commerce trends\u00a0Like all strategies, a brand\u2019s approach to social commerce and order management needs continuous improvement to stay relevant in a fast-changing environment. This requires keeping up with the evolution of ecommerce payment fraud tactics and the social media landscape at large.Payment fraudsters are always adapting their tactics to work around the barriers retailers place in their path. Now, with generative AI tools offering automated and customizable fraud as a service, criminals can experiment with different approaches faster, and on a wider scale.For example, genAI enables realistic-looking imposter social accounts and websites for phishing, as well as synthetic identity creation that criminals can use to obtain credit to spend online and then disappear. Detecting these attacks requires AI tools that can match the pace and scope of AI-backed fraud without increasing false declines.Brands should also keep an eye on news about social platforms. Specific platforms rise and fall in popularity over time, and events like new app debuts and even elections can change consumers\u2019 social media habits.This year in particular, brands need to keep an eye on what ByteDance will do with TikTok in the US now that the federal government has required it to sell its US operations or shut down. The outcome may require brands and influencers to migrate to other platforms with different social commerce practices and fraud-risk profiles.Lock in social shopper loyaltySocial commerce can help brands grow their customer base, especially among younger consumers who look to influencers for recommendations on what to buy. Maintaining a good reputation among these discerning and vocal shoppers requires an excellent customer experience.In a space where competition for attention and spending is fierce, reducing false declines can help your brand earn and keep influencers\u2019 and customers\u2019 loyalty.  Smarter sales, service, e-commerce.Start HERE."},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2024","item":"https:\/\/www.the-future-of-commerce.com\/2024\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"06","item":"https:\/\/www.the-future-of-commerce.com\/2024\/\/06\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"06","item":"https:\/\/www.the-future-of-commerce.com\/2024\/\/06\/\/06\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"Ecommerce fraud risks: Preventing false declines for social shoppers","item":"https:\/\/www.the-future-of-commerce.com\/2024\/06\/06\/ecommerce-fraud-risks-false-declines\/#breadcrumbitem"}]}]