Black Friday is one of the biggest shopping events in the calendar but recent research suggests false declines could be harming merchant profits, especially at such sales boom times.
A false decline is when a merchant or issuer security systems flags a non-fraudulent transaction as fraudulent and, thus, refuses it.
The value of false declines per year now stands at $118bn and this is more than 13 times the $9bn lost annually to card fraud. It has been estimated that one in six cardholders experienced a false decline because of (incorrectly) suspected fraud.
These instances are a headache for consumers and merchants alike. Tackling false declines relies on having a robust fraud prevention system in place that not only keeps out the criminals, but let’s in the honest shoppers too. This requires sophisticated technology and there are plenty of providers out there who can offer it. No matter what, though, at its heart a robust and simple method of authentication that both the merchant and consumer trust has to be present.
One of the fundamental flaws with remote transactions is that there is often no sure fire way to demonstrate that the person making the card payment is the legitimate card holder. This means that fraud prevention software has to use a risk rules.
For example, if it is a first time shopper buying a big ticket item, this will be flagged up as being more likely to be fraudulent. Yet, Black Friday is all about picking up big ticket consumer goods at prices that, while knocked down, are still expensive. And it is also about attracting new consumers. So, with this in mind, it isn’t surprising that false declines are a key threat on Black Friday.
Beating them, then, means consumers being able to prove that they are the legitimate holders of the card they are using. And this means being able to authenticate themselves in a quick and easy fashion.
There are methods on the market which facilitate this, using factors such as biometrics, machine learning, PIN, password and in combinations. All of these can help cardholders demonstrate that they are who they say they are.
Getting this right will mean fewer false declines. And fewer false declines will make for a better Black Friday weekend.