False Declines Are Harming Brands As Users’ Complaints Reach Thousands in Social Media

May 8, 2024

According to the latest report by global risk tech solution provider, ClearSale, failing to ensure seamless transactions can have a drastic impacton a company.

The report, titled Ecommerce False Declines & Consumer Behavior, hopes to clarify consumer behavior when they encounter fraud as well as false declines, as well as the impact on their brand loyalty.

Between 2020 and 2021, the Federal Trade Commission saw almost five million fraud reports from consumers.

Despite the increase in fraud aided by AI, consumers are not shying away from the prospect of online shopping. Retailers must navigate a very thin line between customer satisfaction and fraud prevention in order to ensure and increase brand loyalty.

According to Rafael Lourenco, EVP and partner of ClearSale, sometimes customers choose to turn away from a retailer due to a false decline, meaning that brand has just lost a lifetime cutomer and whatever value they might have brought, which can be significant – even one false decline could lose a retailer around $25,000 from a single customer.

Highlights

83% of surveyed consumers admitted they would not return to a retailer that failed to protect them from fraud.

in 2022 only, 83% of customers experienced false declines, and 36% experience them in repeated occasions.

22% of Baby Boomers and 41% of Gen Z who experienced false declines decided to share their experience on social media platforms.

65% of these false declines where later verified and turned out to be legitimate transactions, making this a devastating blow
on retailers’ revenue.

Navigating the thin line between fraud and customer satisfaction is tricky, however, it is incredibly important for merchants to use any tools they can get their hands on in order to avoid any further loss in revenue.

 

To that end, in their report, ClearSale not only highlights the problems but also offers strategies for fraud prevention in order to enhance customer satisfaction in e-commerce.

Want to learn more? Check out The Fintech Times’s full write-up here.

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