Study: Online credit card fraud carries many costs
The negative impact of online credit card fraud is often worsened by retailers’ response.
According to a new study from fraud prevention solution provider Riskified, online credit card fraud is common. Almost half (49%) of consumers surveyed reported having been a victim of credit card fraud, where their card information was illegally used by someone else. Among all respondent groups aged 31 or older, a majority of consumers were the victims of credit card fraud.
The study also shows retailer response to online credit card fraud is critical. Forty-nine percent of customers reported that they do not return to an online retailer after a fraud incident has taken place. Among victims of credit card fraud, more than one in four (29%) blamed the retailer that approved the fraudulent purchase.
Thirty percent of respondents reported having an order declined, and 57% of those declines happen to returning customers. The survey further found that roughly 42% of shoppers who experienced a decline moved on, either abandoning the purchase completely (28%) or shopping with a competitor instead (14%).
Eighty-four percent of survey respondents reported abandoning a purchase in progress at some point. More than 71% of cart abandoners blamed the checkout process — for being overly complicated, not mobile optimized or seeming untrustworthy — as the reason they abandoned their purchase.
The study also found that:
• 48% of households with an annual income of $1 million or more have reported legitimate purchases as fraudulent. This was by far the highest level of false claims of fraud, with no other income bracket even reaching 40%.
• Meanwhile, lower income households were least likely to be reimbursed for charges fraudulently made with their cards. Only 35% of lower income households were refunded the full amount of the fraudulent activity.
• 38% of respondents admitted they have or may have created multiple email addresses to gain additional online shopping discounts.
Riskified surveyed 5,000 U.S.-based consumers aged 18 and older about their online shopping behaviors, experience with and prevalence of credit card fraud, repeat shopping likelihood and customer satisfaction.
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