ClearSale's report, Ecommerce False Declines and Consumer Behavior, examines how false declines harm both the customer journey and retailer revenue. Original research found that 83% of customers would not return to a retailer that failed to protect them from fraud, 25% of respondents experienced false declines in 2022, and 65% of false declines were later confirmed as legitimate transactions. The report shows that balancing fraud prevention with customer satisfaction is critical, since a single false decline can cost $25,000 or more in lost customer lifetime value.
MIAMI, FL (April 9, 2024) -- Global risk technology solution provider, ClearSale (www.clear.sale), has released a comprehensive new report that sheds light on the prevalence and consequences of false positives, commonly known as false declines. The highly anticipated report, Ecommerce False Declines & Consumer Behavior, takes a deep dive into the economy of false declines, uncovering their detrimental effects on both the customer journey and a retailer’s bottom line.
The Federal Trade Commission received nearly 5 million fraud reports from consumers in 2020 and 2021. While fraudsters are escalating attacks and devising more sophisticated strategies with the help of AI, consumers continue to increase their appetite for online shopping. The report, using original research from ClearSale, will equip retailers with crucial insights to navigate the delicate balance between customer satisfaction and fraud prevention.
Key findings from the report include:
- Consumers are sensitive to fraud: 83% of customers stated that they would not return to a retailer that failed to protect them from fraud.
- Widespread false declines are an issue: In 2022, 25% of respondents experienced false declines, with 36% encountering multiple instances.
- False declines = social media outcry: Across all age groups, consumers indicated a tendency to voice grievances on social media platforms, ranging from 22% of Baby Boomers to 41% of Gen Zers.
- False declines are impacting retailers' revenue: Alarmingly, 65% of false declines were later validated as legitimate transactions, resulting in significant revenue loss.
In addition to highlighting consumer perceptions and behaviors, ClearSale’s report offers actionable strategies for fraud prevention and enhancing the customer experience in ecommerce.
“When customers turn away from a retailer because of a false decline, that merchant loses the opportunity for a loyal customer as well as their lifetime value, which can be significant,” said Rafael Lourenco, ClearSale EVP and Partner. “One false decline could result in $25,000 or more in lost revenue from a single customer. That’s why it’s so critical to get this report into the hands of online retailers so they can make informed decisions about their customers' purchase experience.”
The report, Ecommerce False Declines & Consumer Behavior, is available as a free download now on the ClearSale site.
About ClearSale
ClearSale (B3: CLSA3) offers the most complete ecommerce fraud protection, combining cutting-edge statistical technology with the world’s largest team of specialized fraud analysts for a balanced, comprehensive, real-world approach. Trusted by over 6,000 customers worldwide and touting a 99% retention rate, ClearSale is the first company to offer chargeback guarantees and the largest company focused on global card-not-present fraud prevention. ClearSale helps businesses prevent fraudulent chargebacks without interfering with the online shopping experience. As a result, clients can sell more, safely, even in dynamic or challenging international markets. Visit Clear.Sale for more information, follow on LinkedIn, Facebook, Instagram, YouTube and Twitter @ClearSaleUS, and subscribe to ClearSale’s podcast Gateway to Ecommerce.
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PRESS CONTACT
Bonnie Moss
Moss Networks
bonnie@mossnetworks.com
818-995-8127
Frequently Asked Questions
What is a false decline in ecommerce?
A false decline, also called a false positive, is a legitimate transaction wrongly rejected as fraudulent. ClearSale's report found that 65% of false declines were later validated as legitimate, causing significant revenue loss for retailers.
How do false declines affect customer loyalty?
Consumers are highly sensitive to fraud-related friction: 83% of customers said they would not return to a retailer that failed to protect them from fraud. When a false decline turns a customer away, the retailer loses that customer's future lifetime value.
How common are false declines for online shoppers?
ClearSale's research found that in 2022, 25% of respondents experienced false declines, and 36% encountered multiple instances. This shows false declines are a widespread issue rather than an occasional inconvenience.
How much revenue can a single false decline cost a retailer?
According to ClearSale EVP and Partner Rafael Lourenco, one false decline could result in $25,000 or more in lost revenue from a single customer when their lifetime value is considered. This makes false declines a significant, often overlooked cost.
How do consumers react to false declines on social media?
The report found that across all age groups, consumers tend to voice grievances about false declines on social media. This ranged from 22% of Baby Boomers to 41% of Gen Z respondents, turning a single bad checkout experience into public complaints.
What does ClearSale's false declines report help retailers do?
The report equips retailers with insights to balance customer satisfaction with fraud prevention and offers actionable strategies to reduce false declines while improving the customer experience. It is available as a free download on the ClearSale site.
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