Establishing fraud detection tools and creating a secure payment gateway for processing credit and debit cards online may be well worth the investment for domestic and international merchants, considering the findings from a recent report on fraud.
LexisNexis released its third annual "True Cost of Fraud Study," and found that retailers lose $230 for every $100 in fraudulent transactions. Even though their total fraud losses decreased, consumers also suffered as a result. They were forced to spend 57 percent more time fixing fraud-related issues and paid more too, as out-of-pocked costs rose to $244, the study found.
Additionally, researchers noted that fraud could become more serious and rates could grow in the future, following the upward trajectory of fraudulent transactions' dollar value.
However, there was also some good news from the study, which reported that fraud rates and transactions have dropped despite higher retail sales.
A separate report from accounting consultancy Deloitte suggests that companies – merchants and retailers included – should be on the lookout for internal fraud threats as well.
"Businesses that do not proactively and effectively manage fraud risks may incur much larger expenses than necessary," the firm warned.
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