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  2. E-commerce Fraud Basics

Do “low-risk” merchants still need a fraud management tool?

In our experience, companies mistakenly believe they are low-risk for two reasons:

  1. Your company cancels any order it finds suspicious. This solves the fraud problem, but it also means you’re probably declining many safe purchases made by good customers who, for some reason, fit a fraud risk profile or have made a small error during the transaction process. This can cause you to lose sales and customer relationships.
  2. Your company has yet to be discovered by fraudsters. This is just a question of time and market exposure. Fraudsters are continually testing combinations of credit card numbers + personal information that they steal or buy on the dark web. Eventually, fraudsters will test this information on your website — and as soon as they realize you have lax fraud protections in place, they’ll launch a large-scale attack. On the other hand, if they test your store and find that you are well-protected from fraud, they’ll move on to other stores that offer an easier target.