Every eCommerce transaction is unique. At the same time, some elements of a transaction will be pretty consistent for most buyers.<\/p>\n\n\n\n
Let\u2019s say you\u2019re looking at one, individual customer. Indicators like IP address, ZIP code, and shipping preferences should remain more or less constant from one purchase to the next. If an order comes in that completely bucks an established buying pattern, you should know to take a closer look, as it may be a case of fraud.<\/p>\n\n\n\n
What about orders that straddle the fence, though? Orders that raise a few flags, but maybe not enough to reliably say it\u2019s a case of fraud? You have to make a judgment call. But, even that can be tricky.<\/p>\n\n\n\n
If you\u2019re too lenient, you may end up accepting a fraudulent order. If you\u2019re too careful, you end up rejecting legitimate customers. That\u2019s where fraud scoring<\/a> comes in, giving you the power to make smart, consistent choices about whether to accept or reject orders.<\/p>\n\n\n [noun]\/<\/em>fr\u00f4d \u2022 skaw \u2022 ruhng<\/em>\/<\/p><\/div> Fraud scoring refers to the process of quantifying the level of risk involved in a transaction. Machine learning technology examines each transaction based on dozens of different indicators, then assigns a simple numeric score representing the transaction's risk level.<\/p><\/dd><\/div><\/dl>\n\n\n\n In a way, you can think of fraud scoring as being like a consumer credit rating. The system assigns different values to different elements of a transaction; dollar value, product category, AVS<\/a> response, and other indicators are all examined. Points are then added or subtracted according to predetermined rules, and a final score is calculated. This score helps quantify the amount of risk a transaction presents.<\/p>\n\n\n\n Many payment gateways offer built-in fraud scoring, but third-party options are also available. Make sure you look carefully at things like customization capability and cost-per-score when considering different service providers, though. It's important to have a fraud scoring system that you can set for your specific business needs and budget.<\/p>\n\n\n\nRecommended reading<\/h3><\/div>
What is Fraud Scoring?<\/h2>\n\n\n\n