Online fraud costs $2.6 billion this year

(about 2% of online sales)

[netguy]

High fraud rates continue to plague electronic commerce Web sites, with criminals expected to steal $2.6 billion from online merchants this year, according to a new survey.

Most importantly...

While fraud stayed essentially the same - about 2 percent of sales - nearly 6 percent of all orders are now rejected, the survey found, up from about 4.5 percent last year.

[msnbc.msn.com...]

This of course means there's a lot of revenue left on the table as more and more merchants decline suspect orders.

Steve

[prairie]

The banks/credit card companies have offered scant help to merchants to minimize online fraud, that's the real scandal.

[netguy]

>>banks have offered scant help

prairie, I agree. The banks even encourage it.

Knowing that the chargeback only effects the merchant, they could care less. We have called several banks many times to have them let cardholders know their cards/card numbers are being fraudulently used - and most say "they will probably determine that on their own when they get their next bill."

In the mean time, they just let the fraudulent charges accumulate, knowing the more the card is used - the more money they make.

[jsinger]

If you reject orders from Nigeria, Indonesia and a few others, that figure plummets.

I think there are (certainly were) some Dot Coms that are more interested in pumping their "reported" sales figures than in eliminating fraud.

A tiny bit of common sense goes a long way. Our losses are about 0.2%, which is inline with bad checks in regular retail stores.