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Understanding the True Cost of eCommerce Fraud

eCommerce fraud presents a dual challenge to merchants: direct financial losses from fraudulent transactions and the operational costs incurred in fighting fraud. These operational costs include expenses related to chargeback management, manual review of transactions, and implementing security measures to prevent fraud. This creates a delicate balance for businesses, needing to protect against fraud while not deterring genuine customers with overly strict security measures.

Operational Costs: Beyond the Surface

The operational efforts to mitigate fraud, such as chargeback management and manual reviews, are time consuming and costly. Chargebacks occur when customers dispute a charge on their credit cards, often leading to merchants refunding the transaction and incurring additional fees. Manual reviews, on the other hand, require staff to individually assess transactions for signs of fraud, a process that is both resource intensive and prone to human error. These activities, while necessary, contribute to the overall cost of fraud management, affecting a merchant’s bottom line.

FUGU’s Post-Payment Risk Prediction: A Game Changer

FUGU introduces a novel approach to this problem with its post-payment risk prediction technology. By analyzing transactions after payment, FUGU allows merchants to gather more comprehensive data on each transaction, leading to more accurate fraud detection. This method significantly reduces the occurrence of false declines — where legitimate transactions are mistakenly rejected — improving customer experience and enhancing trust. FUGU’s technology has demonstrated the ability to identify and reduce chargebacks, including those resulting from “friendly fraud,” where customers make a purchase and then dispute the charge without justification.

The Impact of FUGU’s Solution

With FUGU’s innovative approach, merchants can reduce operational costs associated with fraud management. This includes drastic reduction in expenses related to manual transaction reviews and chargeback processing, as well as mitigation of revenue loss from false declines. Ultimately, FUGU’s solution not only addresses the financial and operational challenges of eommerce fraud but also enhances the overall customer experience, leading to increased loyalty and sales.

Merchants should keep in mind that the cost of eCommerce fraud extends far beyond the immediate financial losses from fraudulent transactions. The operational costs involved in managing fraud, such as chargeback processing and manual reviews, significantly impact the bottom line. FUGU’s post-payment risk prediction offers an optimal solution, reducing operational costs while improving accuracy in fraud detection. By embracing innovative solutions like FUGU, sellers can protect their revenue and ensure a positive shopping experience for their customers.