How can etailers prevent fraud without impacting on the customer journey?

By Barley Laing, the UK MD at Melissa

Over the last couple of years there’s been a huge growth in online sales. Not long ago the Office for National Statistics (ONS) revealed e-commerce sales increased 46 per cent in 2020, compared with 2019. The fastest increase since 2008.

The worry for retailers is that this growth in online transactions has seen a corresponding rise in fraudulent activity. Figures from Juniper Research highlight that the value of losses due to e-commerce fraud will rise from $17.5bn (£12.6bn) in 2020 to over an estimated $20bn (£14.4bn) by 2021; a growth of 18% over a single year.

It’s clear that retailers need to put procedures in place to prevent fraud. However, it’s vital that these don’t impact negatively on the customer journey. In a highly competitive e-commerce sector with so much similarity in the quality and price of products on offer, it’s vital that vendors deliver a standout experience to ensure happy customers. This is something that’s particularly important in these challenging times.

Electronic identity verification (eIDV) reduces fraud risk and delivers a seamless customer journey

By far the fastest, most accurate and cost-effective way to deliver ID verification online, and therefore reduce fraudulent activity, is to embrace electronic ID verification (eIDV). Such a tool will help to prevent fraud in real time at the point of customer access online, by ensuring retailers are dealing with the person they think they are. eIDV does this by making cross-checks in real time against the data provided by the shopper – such as their name, address, phone number, email address and date of birth. However, to do this effectively you need access to billions of global records in real time.

With eIDV it’s this real time automation of cross-checks which makes it possible to deliver a seamless customer journey, and therefore help to provide a standout customer experience.

The good news is these eIDV capabilities are delivered through apps, SaaS, and web APIs, and are therefore straightforward to integrate into existing online platforms. They can also easily be scaled up, delivering as little as 100 checks per year through to many millions, if required.

Use eIDV with an address verification system (AVS)

In tandem with eIDV, to also ensure a standout customer journey while helping to stop fraud, it’s important retailers use an automated address verification system (AVS). It’s a service provided by major credit card processors and banks to enable merchants to authenticate ownership of a credit or debit card used by a customer, in real time. The credit card company or issuing bank automatically checks the billing address provided by the customer to the retailer against the billing address in its records, and reports back to the vendor. Using this information, in real time, the merchant can stop purchases made by unauthorised users.

Automated not manual checks


The only alternative beyond automated technology delivering ID verification, is manual checks. This is not conducive to delivering a good customer experience, because physical checks are time consuming. They are also significantly more costly compared with using existing proven ID verification technology.

Address autocomplete / lookup services prevent fraud and provide a standout customer journey

It’s not only automated tools like eIDV that retailers should consider to prevent fraud and deliver a standout customer experience, but simple data quality practices. A great place to start is with an address autocomplete or lookup service. These are tools which make sure only deliverable and verified addresses enter your system.

They work by automatically revealing a suggested correct version of the address as the customer completes an online contact form, enabling them to select one that’s not only accurate but easily recognised, and correctly formatted for their country location in real time. They also prevent mistakes caused by fat finger syndrome, by reducing the number of keystrokes required when typing an address by up to 70 per cent. This speeds up checkout and reduces shopping cart abandonment, aiding the delivery of a standout customer journey.

Using tools such as an address lookup service to deliver accurate and verified customer data ensures communications are efficiently delivered to provide a good customer experience – avoiding the dreaded and expensive mis-deliveries. They provide data that can be effectively analysed to gain valuable customer insight that retailers can use to keep existing customers happy, including personalised communications. The insight gained can also be used to drive secondary sales.

With little differentiation in price and quality online it’s those etailers that seek out the automated technology that gives them the edge over rivals in terms of the customer journey and experience. To this end, when it comes to the growing issue of fraud it’s critical retailers use those tools, such as eIDV, that ensure the customer journey isn’t impacted when undertaking the necessary ID checks to protect themselves against fraud.

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