Customers Punish Brands for Poor Online Transaction Review; too Much Fraud Prevention Can Be Just as Damaging to Business as too Little

Accertify, January 23, 2012 /PRNewswire/ --

New research sponsored by Accertify also that Britons are wary of shopping online via tablets and smartphones

Accertify, a leading fraud prevention and risk management provider, recently commissioned a study of "connected" UK adults -those with access to both a smartphone and a web-enabled computer - to learn more about how consumers perceive and are affected by online fraud. With consumers continuing to focus on the security of online transactions, the bottom line is that an ineffective fraud prevention programme is not only bad business, it's bad for business.

The survey, commissioned by Accertify, an American Express company, found that consumers will change their shopping behaviour if they have a negative experience with a fraud protection system. In addition, the survey found that consumers feel more vulnerable to fraud online than when shopping or conducting financial transactions in person. Ninety percent of respondents regularly make a purchase or conduct a financial transaction online, and nearly two in three (65%) consumers believe that more fraud occurs when conducting transaction sonline than in person.

Getting the Mix Right is Difficult But Imperative to Keeping Customers

When businesses look for an effective fraud prevention solution, they quickly realise that one size does not fit all. Many consumers report encounters with fraud solutions that are either too lenient or overly restrictive. Nearly half of genuine consumers (48%) have encountered a fraud protection system that unnecessarily delayed or denied their transaction, the survey found.

These sorts of problems can actually cause consumers to change their shopping behaviour. Among consumers who have experienced transaction delay or denial, nearly half (48%) said they would penalise the business responsible for an improperly delayed or denied transaction by moving or considering moving their business to a competitor, and 15% of consumers immediately move their business to a competitor. In addition, the degree of frustration that consumers voice over transaction delay and denial is severe. Over half of consumers who have experienced delay or denial (51%)believe that having a legitimate transaction denied is even more frustrating than getting through to a real person on the phone at their local council.  

"It's crucial that businesses acknowledge that disappointing an online customer can have costly repercussions," says Mike Long, vice president of Accertify EMEA at American Express. "Not only will you be losing revenue from future transactions, but your competitors are going to benefit at your expense. Instead of manually reviewing every suspect transaction, merchants need to implement an automated fraud prevention system that is easily adjustable to account for emerging fraud threats and customizable to changes in their business.This way, they can ensure that legitimate customers avoid the transaction delays or denials that drive them to transact elsewhere."

Through the Eyes of the Consumer

As more commerce continues to move online, understanding consumers' security concerns and preferences relating to conducting business online will be crucial in maintaining a competitive edge. According to the survey, consumers today are conducting the most online transactions in the retail industry (79%), followed by banking and finance (70%), online auctions (50%), travel (43%), entertainment (34%) and the music and movie downloads (33%) industries.

"Consumers are increasingly thinking about security in choosing where to take their business. Effective fraud prevention programs are quickly becoming an integral part of online merchants' business models to appeal to the tech savvy, tablet-toting consumer," added Long.

The Accertify survey also found that consumers are wary of transacting online using newer popular devices, such as tablets and smartphones.In fact, by large margins,online shoppers find computers more trustworthy than tablets or smartphones when making online purchases: 92% of respondents perceive their computer to be the most secure device for online shopping whereas only 6% trust their smartphone and 2% trust their tablets.

Additional survey findings include:

• Younger consumers are more likely to penalise retailers for an improperly delayed or denied transaction: Among consumers ages 18 to 24 that have experienced transaction delay or denial,27.9% immediately move their business, 18.6% begin actively looking to move their business and 16.3% consider moving their business.
• Older consumers are more trusting of online transactions: 58.9% of consumers over the age of 55 believe that more fraud occurs when shopping online than in person versus 65.9% of consumers ages 18 to 24 and 73.1% of consumers ages 25 to 34.

If you are interested in additional findings from the survey, such as online purchasing habits during the 2011 Christmas shopping season or statistical breakouts by consumer demographic, please email Accertify@kwitco.com.

About Accertify

Accertify Inc., a wholly owned subsidiary of American Express, based in Itasca, IL, is a leader in providing e-commerce companies with hosted software solutions, tools and strategies for preventing online fraud and mitigating enterprise-wide risks. Its Interceptas^® platform integrates every component of fraud prevention, applies state-of-the-art automation to each step in process and offers advanced capabilities for managing fraud data. Built with a merchant's perspective, Interceptas delivers flexibility in preventing various types of criminal behavior, including fraud related to card-not-present purchases, online scams and policy abuse, merchandise returns and exchanges and other data management challenges. Accertify is committed to providing online companies with the most cost-effective solution to fraud available. For more information, visit http://www.accertify.com.

Methodological Notes:

The Accertify UK Survey was conducted by Wakefield Research (http://www.wakefieldresearch.com) among 500 "connected" UK adults ages 18+, i.e. those with access to a smartphone and internet access on a computer, between November 30th and December 12th, 2011, using an online survey.Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. The margin of error for this survey is 3.1%.