How Fraud Prevention Affects Online Shopping Cart Abandonment Rates

Fraud Prevention Impact on Online Shopping Cart Abandonment Rates

Online shopping is growing at an incredible rate, but the number of abandoned online shopping carts (when shoppers put items in their online basket but leave before completing the purchase) is also on the rise. In fact, a whopping 69% of online shopping carts are ditched throughout the year, leading to a retail loss of over $4 trillion annually.

Many factors influence customers to abandon their digital carts, including hidden transaction fees, surprise delivery charges, security concerns and difficulty getting a payment approved. The last two factors account for 11% of online shopping cart abandonment, and having inaccurate fraud prevention tactics in place could be an influencing factor.


The Great Cart Depart

Companies are right to be on high alert against fraudsters, but sometimes e-commerce merchants are so dedicated to fighting fraud that they turn away legitimate customers due to the suspicion of fraudulent activity (called a false positive). For example, typical fraud prevention methods that use strict, pre-determined rulesets are likely to flag an order as fraudulent if the shopping cart value is higher than average or if the shipping details don’t match the customer’s usual shipping address. While these rule settings often filter out illegal transaction activity, they sometimes filter out legitimate activity as well. An example would be if a trustworthy customer happens to get a bonus at work and decides to use the unexpected cash windfall to purchase and send an extravagant gift to a family member. When his or her credit card is declined due to fraud suspicion, then customer frustration – and in many cases, online shopping cart abandonment – ensues.


A Tisket, A Tasket, More Than An Empty Basket

What some retailers might not realize is that abandoned online shopping carts equate to more than just lost sales in any given moment. When a customer abandons his or her cart due to a false positive, he or she is likely to start shopping at a competitor’s website instead — which could lead to a lifetime of lost revenue potential per unhappy customer. In fact, one study shows that nearly 90% of people will turn to a competitor following a dissatisfactory experience with a business.

READ MORE: False Positives Hurt Your Business More Than You Might Think


Finding A Solution

Tackling online shopping cart abandonment is no easy task (if it were, giant e-commerce conglomerations would have eliminated the problem by now). But there are ways to significantly reduce cart abandonment rates. The first thing any business should do is to make sure that every step of the transaction is transparent for customers. This includes clearly stating things like transaction fees and delivery costs up front so customers don’t have any last-minute unexpected surprises that could cause them to develop cold feet.

Another step businesses can take is to examine their fraud prevention software and make sure that an efficient, intelligent solution is in place. For example, companies that pull device information from a large, high-quality device pool are better able to determine the probability of fraud than companies that have smaller, low-quality device pools.

Fraud products that use machine learning elements are also well-equipped to decipher the very subtle differences between trusted users and fraudsters so incorrect card declines happen less often. Innovate, self-learning software can examine a large variety of purchase attributes with precision and recall in order to determine whether a trusted user or a fraudster is responsible for “suspicious” purchases. The ability to instantly ascertain the difference between legitimate customers and criminals in these difficult to decipher circumstances cuts down on false positives and therefore reduces shopping cart abandonment rates.

For more information on how RISK IDENT can help prevent shoppers from bowing out of e-commerce transactions due to payment approval issues, contact our team today at

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Felix Steinmann – Managing Director

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