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Survey : online fraud 2009

Posted by Michael Bloch in online world (Friday November 20, 2009 )

According to an annual CyberSource Corp. survey, Ecommerce merchants feel they are winning the ongoing battle against online fraud.

Key findings from the survey include:

– Projected losses to U.S. and Canadian eCommerce in 2009 are expected to be $3.3 billion, down from $4 billion in 2008. I’m not sure if that figure takes into account the whopping costs associated with credit card chargebacks.

– Merchants surveyed said they will lose 1.2% of their online revenue to fraud this year, making it the lowest percentage in the survey’s 11 year history.

– Merchants allowed through a higher percentage of incoming orders this year, yet experienced a lower fraud rate.

– Fraud rates on international orders dropped a whopping 50% during – down from 4% to 2%.

It’s pretty good news and mostly due to merchants being more aware of fraud and implementing more advanced fraud screening strategies and tools.

However, merchants participating in the survey also said that fraud is becoming more sophisticated – so it’s certainly not time for online merchants to drop their guard, particularly if you’re selling consumer electronics.

Retailers of consumer electronics reported the highest fraud rate at 1.5%, even though these retailers reject 6.6% of orders, which is far above the average and double the rate of the next highest category.

While automated tools certainly help, sometimes humans do it better. Of all ecommerce transactions, 20% are being manually reviewed and over 70% of merchants manually review orders.

The results of the survey were based on responses from 352 retailers.

The CyberSource 10th Annual Online Fraud Report can be downloaded here (free registration)


Fraud screening tips
Preventing friendly fraud
Reducing and challenging chargebacks


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