Fraud Losses Pile Up for Online Retailers

• the fraud loss rate will hold constant at 1.4 percent of online revenue, the same as the past two years;
• 2.9 percent of all online orders were rejected this year due to suspicion of fraud, down from 4.2 percent in 2007;
• 87 percent of respondents said they don't plan to add fraud support staff in 2009;
• 2 percent of all accepted consumer electronic purchases online this year were fraudulent, the highest percentage of a product category;
• respondents said fraud on international orders was 3.6 times greater than domestic orders, accounting for 4 percent of all international orders; and
• smaller and midsize online retailers ($5 million to $25 million in online revenues) were most challenged by fraud, reporting fraud revenue loss rates of 1.6 percent vs. 1.2 percent for companies with online revenues in excess of $25 million.

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