ILD – Protect Ecommerce Revenue with These 3 Tips

Ecommerce merchants lose more than 1.2% of their annual revenue to fraud, according to a survey by the Merchant Risk Council (MRC) and CyberSource. Some might be tempted to shrug their shoulders and say, “Eh, that’s the cost of doing business.”

But that’s not your attitude. After all, what would you do with that 1.2%? Hire additional staff? Invest in a new revenue stream? Pay yourself what you’re worth? These three tips will help you stop the ecommerce fraud that’s draining your bottom line:

#1Get a good partner – Find a payment processor with the experience to help you reduce the risk of fraud. Look for a proven track record in the alternative payment industry, as well as established best practices in place to minimize fraud. Also look for a company that uses best-in-class technology and continually works to improve services.

#2 Use tools – The same MRC/CyberSource survey found that the more tools—both automatic and manual—a merchant uses to detect fraud, the lower the level of fraud that merchant experienced.

Look for an alternative payment processor with the right tools, such as real-time verification of a customer’s name, address, and phone number. Implement fraud detection tools for other payment options, like credit cards, too. Ecommerce Resources, for instance, recommends asking for the credit card verification code (CVV2), which is the tiny 3- or 4- digit number on the card’s signature strip. A customer who provides a correct CVV2 number should, theoretically, have the card in their physical possession.

#3 Create a plan – When it comes to protecting your business revenue, fraud prevention shouldn’t be a fly-by-the-seat-of-your-pants effort. Design internal strategies to manage the risk and reduce fraud. Don’t let your newly-minted plan collect dust in the drawer, either. Schedule periodic assessments so you’re able to continually improve the processes.

Don’t continue to lose 1.2% (or more!) of your hard-earned revenue. Contact ILD, a team with the alternative payment processing technology and know-how to help merchants stop losing money to ecommerce fraud.

The death of the credit card is inevitable. 

You don’t agree? Read this 3-part series.

The oldest payment method in civilization is making a strong comeback.  No, not gold (that’s for another post).  Rather, the concept that if you are going to buy something, you’re going to have to pay for it.  Consumers are shifting away from the “borrow and buy” mentality back to the “cash and carry” model which has been used for civilizations.   

If back in the day, you didn’t have the money to pay for merchandise, then you went without.  Not the norm anymore, given all the plastic in our wallets.  Believe it or not though, consumer credit is still a relatively recent phenomenon – for how much longer we have to ask?  To answer that, we’ve got to understand the history.

History.

The first modern consumer credit cards were developed only 60 years ago (in the 1950’s) with Diners Club, followed by American Express, then Bank of America (“BofA”) with their BankAmericard (which is now Visa) close behind.  In an effort to capitalize on the “all-purpose credit card”, companies started dropping preapproved credit cards to unknowing consumers.  BofA, for example mailed over 60,000 preapproved cards to folks in Fresno, California, although those consumers never asked for them.  Others again followed suit, and the next thing you know the scams started - people are stealing credit cards out of mailboxes, consumers are getting billed for cards they never knew they had, and a black market  began in stolen credit cards and identity theft. 

Things got a little better in the 70’s, when Congress began regulating the credit card industry.  For starters, they banned the practices of mass mailing active credit cards to those who had not requested them (some of whom were even dead).  However, not all government regulations have been so consumer friendly. In 1996, the U.S. Supreme Court in Smiley vs. Citibank lifted restrictions on the amount of late penalty fees a credit card company could charge. Deregulation has also allowed very high interest rates to be charged.  In an effort to get consumers to use, award points programs were promoted and in the decades since, using a credit card has become so universal that paying with cash has become passé. Check your wallet, how much cash do you carry around these days? 

Continue to Part 2 of this 3 Part series.