Forter has just recently released their Annual eCommerce Revenue Optimization (AERO) reports.

Forter Report Shows the Cost of “False Declines”

Forter has just recently released their Annual eCommerce Revenue Optimization (AERO) reports highlighting the devastating cost of falsely declining eCommerce transactions from new customers across a multitude of industries including Apparel & Accessories, Food & Beverage, Home & Garden, and Beauty & Health.  

In 2020, eCommerce exceeded $4.3 trillion dollars, a metric originally forecast for 2025. The industry has leapt forward five years. Though, fraud and abuse has grown rapidly as a symptom of the global pandemic. The real focus for businesses is to grow and maintain that growth. This has created new opportunities, challenges, and goals for businesses everywhere especially businesses who depend on online transactions for a significant portion of their business.

For the food and beverage industry, Forter’s AERO report demonstrates how new users represent 6% of gross merchandise value. Thus, without an effective fraud prevention solution, organizations would be rejecting new users at approximately 6x the rate than if they implemented a fraud prevention system. According to Forter’s AERO report, companies within the food and beverage industry could potentially lose up to $27M in lost customer lifetime value every year.

Other industries suffer similar fates. The beauty and health as well as the apparel and accessories industries value of transactions from new users represents 3% and 4% respectively of gross merchandise value.

While the home furnishing and gardening industry benefits greatly from an effective fraud prevention solution. Forter’s most recent AERO analyzing the industry shows a loss of $24M in lost customer lifetime value every year that an organization does not enable modern fraud preventive measures and solutions.

Ultimately, organizations must protect against eCommerce fraud while minimizing false declines that could be harmful to their profits and growth. Unfortunately, it has become even easier to carry out fraud due to the exponential rise in online transactions combined with a labor shortage. A business can become rapidly overwhelmed with effectively managing the intensive return process.