{"url":"https://www.clear.sale/blog/heres-why-your-order-approval-rates-arent-what-you-think","title":"Here’s Why Your Order Approval Rates Aren’t What You Think","tldr":"If you’re autodeclining e-commerce orders perceived to be at risk, you may be seriously underestimating missed revenue. Here’s why.","markdown":"Today’s e-commerce customers have high expectations. They want a seamless online experience that lets them find and buy whatever products they want, whenever they want them. Retailers who can’t deliver this online experience risk losing both these customers *and* their lifetime value.\n\nBut balancing an exceptional customer experience with protecting your growing business against credit card fraud isn’t easy. In fact, it may seem impossible to be able to do both well.\n\nSo many merchants find themselves erring on the side of caution and declining every order that appears fraudulent. While this approach can certainly reduce fraud exposure, it can also inherently increase your [false decline problem](https://blog.clear.sale/does-your-e-commerce-fraud-team-track-false-positives), inadvertently flagging legitimate orders as fraudulent and incorrectly declining them.\n\nWhen it comes right down to it, these false declines cost retailers more money than fraud. In fact:\n\n- 58% of declined transactions are false declines.\n\n- Retailers lose more money to false declines ($118 billion/year) than to actual credit card fraud ($9 billion/year).\n\n- 32% of customers who experience a false decline choose not to shop with that merchant again.\n\nThink you’re not at risk? Here are two other ways this increase in false declines may already be affecting your order approval rate.\n\n## 1. You Calculate Order Approval Rates Incorrectly\n\nWhen it comes to approval rates, accuracy is key. If you don’t have an accurate picture of what’s happening with your orders, you can end up seriously underestimating the revenue you’re missing out on.\n\nHere’s the problem: Declined orders don’t show up on your P&L, and this can make many e-commerce teams, including your own, blind about these numbers and their importance.\n\nYou also might be calculating order approval rates wrong — excluding all auto-declined transactions from your numbers because you mistakenly believe *all* your auto-declined orders weren’t good.\n\nAs a result, your approval rates won’t be telling you the whole (or the right) story.\n\nFor example, your orders might look like this:\n\n$ Orders\n\n$100,000,000\n\nAuto-approved orders\n\n$95,000,000\n\nAuto-declined orders\n\n($2,000,000)\n\nOrders needing further review\n\n$3,000,000\n\nOrders approved after review\n\n$2,100,000\n\nOrders declined after review\n\n($900,000)\n\nFinal approved orders\n\n$97,100,000\n\nIf you’re excluding auto-declined orders from your order approval rates, you might think your approval rates are:\n\n$ Orders (excluding auto-declines)\n\n$98,000,000\n\nFinal approved orders\n\n$97,100,000\n\nOrder approval rate\n\n99.1%\n\nHowever, you don’t know for sure that all those auto-declined orders were in fact fraudulent. In actuality, this is what your approval rates *really*are:\n\n$ Orders (total)\n\n$100,000,000\n\nFinal approved orders\n\n$97,100,000\n\nOrder approval rate\n\n97.1%\n\n**That’s quite a difference in approval rates!**\n\n## 2. You Limit Your International Growth Potential\n\nAlthough many e-commerce merchants want a slice of the international market, only 20% believe they’re ready to [take the risk](https://blog.clear.sale/maximize-the-upside-of-cross-border-e-commerce-and-minimize-the-risk) that comes with international sales. So many companies turn to automated e-commerce fraud prevention programs, thinking that will be enough to confirm global customers are who they say they are.\n\nThe problem? This all-or-nothing approach creates a second problem: false declines. Automated programs tend to be built on scoring and filters that automatically decline any and all orders perceived to be high-risk. And for e-commerce merchants with a focus on expanding globally, these declines could end up being a big percentage of their incoming transactions.\n\n### A One-of-a-Kind Solution\n\nPreventing fraud and chargebacks doesn’t have to mean autodeclines that insult your customers and result in lost sales.\n\nIf you’re looking for a better solution, ClearSale has the answer. One of the best ways to increase order approval rates safely is by using a high-tech manual review process that combines their:\n\n- Proprietary machine learning technology and proven statistical techniques assessing every order\n\n- Team of more than 700 highly trained and experienced fraud experts conducting manual reviews for “gray area” transactions.\n\nBecause ClearSale never automatically or incorrectly declines orders, we’re the only solution on the market that can reduce the number of false declines that can cost sales and customer relationships.\n\nSo when you’re ready to grow your business and exceed customer expectations — all while benefiting from the resources of the **largest fully outsourced fraud prevention company in the world**, [contact ClearSale](https://www2.clear.sale/contact).\n\n**More order approvals. Fewer chargebacks and declines. Higher revenue. What’s not to love?**\n\n****"}