What is ecommerce fraud management?

Fraud management is the practice of protecting your shop from fraudulent activities that could jeopardize revenue and customer trust. As fraud, such as unauthorized transactions or account takeovers, runs rampant across ecommerce businesses, merchants rely on advanced strategies and technologies to prevent, detect, and mitigate these attacks.

Effective ecommerce fraud management ensures a balance between blocking fraud and approving genuine transactions by employing tools like AI and machine learning to analyze complex behavioral and transactional data. 

A critical component of effective fraud management is partnering with an accountable fraud provider. Such partners align their financial interests with the merchant’s success by assuming responsibility for fraudulent transactions they approve, often through chargeback guarantees and performance-based models.

These incentives drive innovation, maintain low fraud and chargeback rates, and optimize approval rates, fostering sustainable growth and profitability for businesses navigating an increasingly intricate digital landscape.

At Riskified, we believe, for many reasons, that as an accountable fraud partner, we will outperform a non-accountable vendor every time, allowing the merchant to achieve a higher ROI through higher revenue, better predictability, and higher profitability. What’s more, the merchant’s executive team can expect this sustained level of performance even as fraud evolves.

Frequently asked questions

What is ecommerce fraud management?

Ecommerce fraud management is the practice of protecting online stores from fraudulent activities, such as unauthorized transactions and account takeovers, that can jeopardize revenue and customer trust. It involves using advanced strategies and technologies to prevent, detect, and mitigate these attacks.

How does ecommerce fraud management balance blocking fraud with approving legitimate orders?

Effective fraud management uses tools like AI and machine learning to analyze complex behavioral and transactional data, helping merchants accurately distinguish fraudulent activity from genuine purchases without over-blocking legitimate customers.

What is an accountable fraud partner?

An accountable fraud partner is a provider that aligns its financial interests with the merchant’s success by assuming responsibility for fraudulent transactions it approves, often through chargeback guarantees and performance-based models.

Why does accountability matter when choosing a fraud management provider?

Accountability drives innovation and incentivizes providers to maintain low fraud and chargeback rates while optimizing approval rates, resulting in higher revenue, better predictability, and stronger profitability for merchants.