There’s no doubt that fraudulent transactions end up costing businesses money. With fraudsters targeting businesses at alarmingly high rates, it’s become more important than ever to protect yourself across every stage of the purchasing journey.
However, this very same protection can often cause a rise in false declines.
How are they costing your business money?
How False Declines Cost Businesses Money
Nearly all online merchants have issues with false declines. Since online purchases only require digital information pertaining to a credit card and not the physical card itself, these transactions have to pass through more rigorous anti-fraud checks, which can result in a higher number of false declines. Although fraudsters are often stopped in the process, many legitimate transactions end up captured in the same net and frustrating good customers.
The question is: How exactly does this rise in false declines impact your business?
There are two primary ways that false declines affect your business financially.
Loss of new business
False declines tend to affect newer shoppers greater than pre-existing ones. New online shoppers are 5-7x more likely to be declined than returning customers by current fraud tools. With our current pandemic situation still lingering, and online consumer volumes higher than ever, this becomes a significant problem for online businesses.
When new customers end up being falsely declined on your website, it can leave them with a poor impression of your business and there’s a good chance that they’ll end up searching for a competitor to suit their needs instead. In fact, 40% of customers who are falsely declined will purchase from the competition instead. It’s hard to blame them. They’ve spent their valuable time searching for a product, only to be denied while attempting to purchase.
The scary part is that many businesses aren’t sure just how badly they’re being affected by false declines. This is why knowing how to find out if you have a problem with false declines is crucial moving forward.
Reputation
Remember the customer who was falsely declined? Well, what happens when they decide to take to the internet and share their experiences with the rest of your target audience? Your reputation will likely take a hit and future business can be affected.
Conclusion
False declines can be costly in more ways than one. The reality is that all online merchants are at risk of experiencing the adverse effects of false declines, making it more important than ever to implement proper protection.
Forter’s Payment Protection service is the perfect solution, helping to reduce false declines by 90% and effectively dealing with fraudsters attempting to target your business.
Are You Having Issues With False Declines?
If you’re wondering how badly your business is being affected by false declines, grab our NUMO (New User Missed Opportunity) report to find out.
