Over the past several months I have seen a trend that is a bit concerning. As I meet with merchants and talk to them about their fraud issues, many of them tell me, “We don’t have a fraud problem.” When I dig a little deeper into the strategies and tactics they use to manage fraud it becomes quickly apparent that they do indeed have a fraud problem but have used several “patches” that cover up the symptoms and result in lower sales.

One merchant was having a terrible time with affiliate related fraud, so they simply took a hatchet to the program and turned it off. They cut off an entire sales channel because of fraud.

Another merchant was manually reviewing more than 15 percent of their orders and was wondering if they would be allowed to hire more fraud agents to handle the expected growth in the coming months. This means slower review times, customer dissatisfaction and lower sales.

Yet another merchant was actually running with two different merchant accounts so they could mask their actual chargeback rate. Hiding the problem doesn’t make it go away. In fact, sooner or later it will be bigger and more urgent and could result in fines and lower profits.

I find these types of draconian fraud prevention methods all too often. From turning off IP addresses for entire countries to declining good orders because of fraud suspicions, merchants are losing out on two percent to as much as eight percent of top line revenue and bottom line profits because their fraud management strategy and tools are not keeping up with fraudsters.

Proper fraud management allows merchants to accept more orders, expand into new markets, channels and geographies and still maintain low chargeback and false positive rates. If you are having trouble maintaining or growing sales, maybe a good place to start looking is your fraud prevention techniques. You might just be surprised at what you find.

For more information about the Kount Fraud Platform, contact Kount today. View the 2-minute video, BeatFraud, Boost Sales™