Question
To the tune of 2.8 billion in 2005, which is an 8% increase over last year on E-commerce fraud.
Which is why more and more customers will not buy on-line anymore.
Answer
Originally Posted by Buckeye
Which is why more and more customers will not buy on-line anymore.
...with mid-size to large merchants experiencing the largest hikes in fraud rates....As a result, the percentage of orders accepted that ultimately turned out to be fraudulent rose to 1.7% from 1.3%, CyberSource said.
You're mixing apples and oranges here. The fraud you reference in this article is on the buyers end, not the seller's. And will ultimately result in increased prices being passed to buyers --ergo fewer legitimate buyers.
Answer
Well said, Mr. Knees.
The article points out that most of the attempted fraud came from non-U.S. buyers and that having those orders actually looked at by a real person catches most of the problems. Of course, the big merchants don't want the expense, but they will have to come to grips with the reality of their situation.
Since the higgest cost to online merchants is that invoolved with acquiring a new customer, it seems to me that there should be an initial manual review system that is marketing oriented, to turn good initial cusotmers into repeat customers, and block the PC's of fraudulent ones.
Retailers also have shoplifiting problems in the stores they run. This is the same thing, but done on-line. The cost of such thievery has always been passed on to the customers. However, I think the on-line cost is much less than in retail outlets where you can often have the staff filching as well as the customers.
Larry
Answer
When someone opens an online store they trade brick and mortar store risks of pilferage, vandalism, credit card fraud, check fraud, and shopper breakage for risks of online fraud, credit card fraud, check fraud. The risks and losses overlap and are similar and I'd suspect the B&M losses as a total are probably higher.