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Retailers’ Online Losses to Fraud Decline



Source: eMarketer
Date: November 24, 2003

CyberSource commissioned Mindwave Research to survey 333 merchants in North America in October, reporting that retailers’ losses from online fraud have declined over the years as a percent of overall online retail from 3.6% in 2000 to 1.7% this year.



The 2003 survey from CyberSource is its fifth annual study of online fraud and merchants in North America. With this year’s study, the company sought to make some sense of all the published estimates regarding online fraud, considering card associations see just a portion of the impact of online fraud. Though the percent of merchants’ online revenues lost due to fraud has declined, CyberSource does note that preventing fraud online is still a significant business challenge.

Indeed 69% of North American merchants are taking precautions to prevent online fraud. The measures most of these merchants are taking include address verification service (75%), manual review (65%) and using internally-built business rules and/or decision rules (49%).



Usage of address verification service (AVS) has risen among merchants over the years, as the CyberSource report in 2001 determined that just 46% of retailers were using AVS, but the 2002 study found that 71% were using AVS. In 2002, 49% of retailers told CyberSource their method of protecting against online fraud was a paid risk management employee.



For an in-depth look at how companies are dealing with online security issues, read eMarketer’s Security Online: Corporate & Consumer Protection.

Original article

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