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July 26, 2021 - Claire Zhou

Are You Treating Your Customers Like Criminals?

Customers reward the companies and brands that make them feel valued. In fact, more than 90% of consumers consider customer service when deciding whether to do business with a company. If that experience is poor, 56% of consumers will take their business elsewhere. One surefire way to kill the customer experience is by treating them too much like criminals.

How would you feel if your favorite clothing store canceled your order because issues in the checkout process raised some red flags? Or what if you traveled outside your home state and your bank froze all of your credit card accounts because your spending patterns changed?

While fighting fraud is essential to maintaining your company’s financial health, doing so at the expense of good customers can have the opposite effect. 

Blurred Lines: Customer or Criminal?

It’s becoming harder for businesses to tell good actors apart from the bad ones. For example, a transaction where a customer’s shipping address and billing address match up looks normal on the surface. But when the package is shipped, a fraudster may change the delivery address to avoid detection, a scheme known as package rerouting fraud.

A recent Gartner report notes that new account fraud and account takeovers are the biggest liabilities for many industries. Usernames and passwords are no longer enough to correctly identify a customer. This information is frequently exposed in data breaches and can be easily discovered by a hacker due to poor password practices by many consumers. 

In response, retailers often add additional layers of security, such as one-time passwords and security questions. But these extra “hoops” mean more work for the customer, which can lead to frustration and cart abandonment.  

Why Current Fraud Detection Systems Are No Longer Enough

Many legacy fraud prevention systems and tools don’t contribute to a frictionless customer experience. What’s more, as business becomes more fluid across borders, devices, and channels that connect your business to your customer, it will become even more important to remove as much friction for customers as possible.

Newer technologies exist that can protect customer experience without sacrificing security and peace of mind for retailers. For example, Gartner calls out bot detection that can identify machine-driven attacks. Bot detection works automatically in the background and has little or no impact on the customer. Gartner also recommends using adaptive tools for authentication based on what the customer is trying to achieve.

Combining a Frictionless Customer Experience with Better Fraud Prevention

For online retailers, the cost of fraud is a serious threat to your bottom line. Ecommerce fraud is expected to surpass $20 billion in 2021, an 18% jump over the previous year. It’s no longer merely an option to prioritize fraud prevention, but taking it to the extreme can also create losses due to a negative customer experience.

Gartner’s Market Guide for Online Fraud Detection - Social

Photo of Claire Zhou
about Claire Zhou
Claire is a Senior Product Marketing Manager at DataVisor with over 5 years of marketing experience in security and fin-tech. She is passionate about empowering enterprise customers with AI-based solutions. Her expertise spans data analytics, cybersecurity, and fraud prevention. Claire has an MBA from UCLA.
Photo of Claire Zhou
about Claire Zhou
Claire is a Senior Product Marketing Manager at DataVisor with over 5 years of marketing experience in security and fin-tech. She is passionate about empowering enterprise customers with AI-based solutions. Her expertise spans data analytics, cybersecurity, and fraud prevention. Claire has an MBA from UCLA.