What approach should businesses take toward fraud prevention?

Businesses of all sizes need to have a fraud prevention strategy. Many ecommerce companies lean on automated solutions and fraud filters, but the best fraud prevention combines multiple tactics into a hybrid strategy.

Fraud filters

Fraud filters set strict thresholds to determine which transactions will be automatically declined. What fraud filters don’t do is account for human behavior. Used alone, companies run the risk of declining too many valid orders and increasing their false declines rate.

The most effective way to use fraud filters to flag suspicious orders for more thorough investigation.

Automated approvals

Using an automated solution on its own can be as risky as only using fraud filters. However, an automated solution with an AI-enabled algorithm that learns from experience can significantly increase approval rates. ClearSale’s solution leverages trends, intelligence and data gathered from decades of fighting fraud in the most high-risk regions of the world. Using this technology, we can automatically approve most orders quickly and flag suspicious orders for further investigation.

Contextual review

For the small percentage of orders that cannot be automatically approved or declined, a contextual review can help reduce the number of false declines and instill trust among your most loyal customers. At ClearSale, our more than 1,500 fraud analysts perform contextual reviews on the 2%-3% of orders flagged by our solution. Because our analysts are trained to identify some of the hardest-to-recognize fraud patterns, they can easily determine which orders should be approved as quickly as possible.

Machine learning

Based on that data gathered in any contextual review, an ideal fraud prevention solution will “teach” the system to better distinguish valid transactions from fraud and reduce the number of transactions that need to be flagged – resulting in higher approval rates and revenue.

Related Topics

Ecommerce Fraud Basics

Chargeback Management

Related Resources

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Why Enterprise Businesses Should Treat Fraud Protection as a Revenue Center

How Growth Impacts Fraud Prevention Strategies

What Happens to Ecommerce Transactions That Are Not Approved?

Why a Secondary Fraud Review Is Worth the Wait

False Declines: Everything You Need to Know About It