E-commerce is developing into a real goldmine for more and more companies. Ever more companies are therefore offering their products online, yet all too often neglect fraud prevention: for fraud crimes are particularly common in the area of online shopping and can become real business risks. Effective protection against online fraud may cost money, but the fraud itself will sooner or later lead to heavy losses. Here, we highlight the kinds of damage that online fraud can cause in your company.
Changed focuses give rise to more risks
In e-commerce, due to the markedly larger target group online and enormous outreach, it’s possible to quickly increase sales figures with good marketing. However, either due to ignorance or naive good faith, many companies are failing to utilise many options for risk monitoring and are outsourcing this task to the different payment service providers.
It therefore comes as no surprise that statistics show that the crime rates in the area of online fraud have been dramatically increasing for years.
In German online trade alone, losses of about 1.3 – 2.4 billion euros occur every year. And the figures continue to grow. This is also because many companies are still inadequately protecting themselves from the different scams and are thus easy game for the fraudsters.
Why online fraud can become a real problem
In particularly, falsified or stolen credit cards and credit card details are becoming a real problem for many online shops. Fraudsters use the cards to order particularly expensive goods for themselves. As many companies are failing to adequately configure the appropriate monitoring tools and relying primarily on the different payment service providers, this form of fraud has become an everyday concomitant of online business.
However, e-commerce fraud can bring serious consequences: because your company can suffer both direct and indirect losses due to the fraudsters.
This is why it’s all the more important to take a comprehensive look at those losses.
Direct losses to companies due to online fraud
First of all, the direct losses are a real problem for your company. For one thing, you lose sales due to the fraud, as the victims of fraud can have the sums reimbursed to them. This then becomes additionally problematic if, for example, expensive products are only stocked in small quantities – and so, on top of the fraud, you also get the problem that potential customers couldn’t buy the goods.
The loss of the goods also plays a major role – because, if the perpetrator can’t be identified, there is usually no compensation for these losses either. Another problem are the credit card companies’ penalty fees, which often pose a threat that you as a company must deal with.
So, as you can see, there are markedly more direct losses than appear at first glance. And that’s not all – as online fraud in e-commerce also brings indirect losses for your company.
Indirect losses due to online fraud
If your company gets an above-average number of fraud cases, it will sooner or later lose the banks’ trust. This can make itself felt in a variety of ways.
In general, it becomes particularly obvious due to more and more customers’ being turned down by banks in order to minimise losses from fraud.
This also means that the reputation of the company and the online shop can suffer in the long run due to online fraud. This can have a negative effect on the existing customer base and scare potential new customers away. Thus, fraud can indirectly give rise to huge losses as well, which can – at worst – rapidly put the continued existence of a business at risk, particularly in the case of small and younger companies.
Avoiding online fraud with the help of experts
It is of course difficult to strike the right balance, as it’s essential to maintain both a smooth-running, simple purchasing process for customers and a comprehensive checking system as a protection against online fraud. This is a problem with which many entrepreneurs are familiar, and which dominates e-commerce.
However, you needn’t reinvent the wheel to find the optimum balance – since, with an experienced partner like anlyx at your side, you can actively reduce the number of online fraud incidents and nonetheless benefit from simple, smooth-running processes.
The experts from anlyx will work closely with you and find the optimum solution for your company and your corporate structure. Just make an individual consultation appointment and assure yourself of the quality of services – because anlyx assists many companies as a reliable partner and has demonstrably been able to markedly reduce online fraud in all of them.