Wednesday, January 19, 2022
Home Customer Experience News Declined Transactions Cause Major Losses in eCommerce: Report

Declined Transactions Cause Major Losses in eCommerce: Report

Forters has released their Annual eCommerce Revenue Optimisation (AERO) reports for 2021, offering an insight into the impact of falsely declined transactions from new customers across industries.

Split into the categories of Apparel and Accessories, Food and Beverage, Home and Garden and Health and Beauty, the reports showed a worrying trend across industries for businesses to falsely decline the transactions of new users due to either security concerns or a purchase appearing untrustworthy.

The calculated losses for the examined industries are as follows:

  • Apparel and Accessories had a direct loss of $500,000 for every $500 million in transactions processed, with new users representing a gross 4% of revenue.
  • Food and Beverage had a direct loss of $750,000 for every $500 million in transactions processed, with new users representing a gross 6% of revenue.
  • Home and Garden has a direct loss of $2 million for every $500 million in transactions processed, with new users representing a gross 16% of revenue.
  • Health and Beauty had a direct loss of $375,000 for every $500 million in transactions processed, with new users representing a gross 3% of revenue.

“As eCommerce brings in more new customers, businesses can optimise their lifetime value or lose them with a single decision. If a customer is falsely declined, there is a 40% chance you just lost all of their business for a lifetime,” said Michael Reitblat, CEO and co-founder of Forter.. “We hope that the findings in our annual AERO report reinforce the importance of striking a balance between fighting fraud and delivering a memorable customer experience.”

About the author

Emily Louise Spencer
Emily Louise Spencer is a graduate of the University of York with a master's degree in Chemistry. A published scientific author, she now works as a freelance writer and copy editor.

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