Of all the problems businesses face in the marketplace, fraud is one of the more challenging, involving complex factors that are often difficult to address.
So when it comes to finding an effective way of preventing fraud, some merchants might think blacklists are a cost-effective, efficient strategy. Unfortunately, they don't always provide the results e-commerce merchants expect -- or need.
Let's look at what blacklists do, and how they might let merchants down.
What Are Blacklists?
When a merchant falls victim to a chargeback, they may add the transaction details (like email addresses, IP addresses and credit card information) to a blacklist. That means the next time a customer attempts to place an order using any of the blacklisted information, the transaction will be automatically declined.
How Blacklists Can Fail Merchants
When a merchant realizes they must implement a fraud protection solution to protect their growing business, they look for a solution that can make quick decisions. While blacklists do just that, there are several ways that blacklists cost merchants, including:
They Reject Legitimate Transactions
While blacklists can help prevent fraudulent transactions from being processed, they also reject legitimate transactions, like when a customer makes a large purchase while on vacation.
And because transactions are rejected automatically -- and more frequently -- an e-commerce merchant's revenue suffers.
They Aren't Efficient for Long
Once a fraudster realizes their buying profile is being rejected because of a blacklist, they'll switch strategies and try a new approach to sneaking fraudulent transaction through.
They Frustrate Customers
When legitimate customers find themselves on blacklists, they may not be quiet about their frustration and they aren't likely to return to make future purchases.
Choosing a Better Fraud Protection Approach
Unfortunately, merchants don't have the luxury of time when it comes to evaluating and approving transactions -- they need a solution that's fast and accurate. That's why many e-commerce retailers are turning to a hybrid fraud solution that uses a trained team of experts and automated analysis to detect even the smallest instances of fraud. It's an approach that makes all the difference in buyer experience and merchant profitability.
Merchants must also look for a solution that can be customized to their industry and pain points. That solution offers merchants a broader understanding of how their business might be attacked, allowing for better protection and the increased ability to protect their legitimate customer base.
If a fraud prevention solution seems too good to be true, it probably is -- and that's exactly what merchants are learning about blacklists. So when you're ready to invest in a comprehensive solution that focuses on stopping fraud, protecting against chargebacks and growing your revenue, contact the experts at ClearSale. Our trusted solution offers a frictionless checkout experience and will help keep your business off fraudsters' radars.