The holiday rush is over, the madness has abated. What’s an e-commerce store to do?

To-Do List, courtesy of john.schultz on Flickr

To-Do List, courtesy of john.schultz on Flickr

Whether we’re talking about your marketing strategy or your fraud management approach, the answer’s the same: Take stock of last year, and see what small changes you can make now – while things are more peaceful – that could pay dividends down the road.

Here are some places to start:

1. Align business goals with fraud goals

Companies are like snowflakes: they may look similar on the surface, but each has its own specific goals and challenges – and these also change as your business evolves. In the new year, make sure your approach to managing fraud risk is in step with the larger organizational roadmap.

Growth on the cards? You’re not alone. According to Sift Science’s Fraud-Fighting Trends 2016 report, 38% of businesses combating online fraud said they are expanding into new markets this year, while 32% are introducing new products or services. New challenges like this may involve revisiting your fraud-prevention procedures. Do you automatically review or reject orders from certain countries? Do you know how to accept foreign credit cards? Have you created specific fraud policies for digital goods versus physical goods?

2. Develop (or re-examine) your fraud KPIs

Do you have existing ways to measure the effectiveness of your fraud prevention tactics? Managing fraud involves balancing a number of tradeoffs: if you accept more orders, you risk letting fraud through. If you reject more, you risk turning away or offending legitimate customers.

Many companies find that it comes down to a few key metrics: percentage of money lost to fraud, manual review rate, proportion of orders rejected, and false positive rate. While all are important, they represent different things. Lost sales are a significant worry for more than two-thirds of businesses combating online fraud, according to the Sift Science Fraud-Fighting Trends 2016 report. Meanwhile, 59% are worried about spending too much time and money on manual review. Examine each metric to determine where your company can do better this year.

3. Take a careful look at your full conversion flow

These days, consumers have become accustomed to simple online experiences. After all, one-click and single-touch ordering can secure a ride home or a pair of socks on some popular websites and apps. Yet a surprising number of e-commerce sites still make it difficult for people to check out – whether it’s through unnecessary form fields or onerous security checks.

Start the new year by doing a full audit of every step in your checkout flow to see if there are any points where you’re holding up legitimate customers as you try to minimize risk. Also keep in mind that there could also be opportunities to remove friction for legitimate customers, as well as adding friction to weed out fraudsters. Should trusted customers really fill out all of the same form fields as risky ones, or can they be sent to a tailored, streamlined experience?

4. Keep an eye on mobile

It’s an increasingly mobile world, with consumers getting more and more comfortable using their phones and tablets to buy everything from pizzas to plane tickets. In fact, Gartner predicts that by 2017, half of U.S. digital commerce revenue will come from mobile. And guess what? Fraudsters are following.

Some businesses have been finding it useful to track mobile orders separately from desktop, to see if there are different patterns between the two. An advanced machine learning fraud detection solution can help your business predict which users are likely to be fraudsters based on data specific to your business’ needs – including mobile-specific information if it’s relevant.

5. Look for opportunities to automate

According to the Sift Science Fraud-Fighting Trends 2016 report, nearly 3 in 5 businesses combating online fraud are worried about spending too much money on manual review. So it’s no surprise that 80% of respondents plan to automate more of their fraud prevention in the new year.

An e-commerce company’s early approach to fighting fraud is often straightforward: lose less money to chargebacks. However, as the business grows and evolves, it enters a new stage, with new concerns – including how to control operational costs. That’s when it makes sense to explore automating as much of fraud management as possible, so employees can spend their time focused only on reviewing truly risky orders. And, ideally, spend much more time on growing business, customers, and sales.

Related topics

e-commerce

fraud

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