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What's Inside
Online sales of fashion are soaring: eCommerce revenue for fashion merchants has been growing at an average of 17.3% annually over the last six years.
But this rapid increase in order volume also means the stakes are higher for accurate fraud detection.
Fashion retailers must avoid chargebacks without falling into the trap of falsely declining good orders. This infographic contains insights and actionable tips from Riskified’s report on CNP fraud in online fashion sales.
The vast majority of fashion orders can actually be safely approved. Lower approval rates may indicate that good customers are being turned away. In this infographic we differentiate between ‘high-end’ fashion–boutique retailers with a focus on luxury, –and ‘mid-tier’ fashion–stores that place more emphasis on affordability.
The location where an order is placed (based on IP address) is an important data point for assessing risk. But there are plenty of good orders coming from even the ‘riskiest’ of countries.
It may surprise some merchants that orders being shipped to certain Asian countries are even safer than those shipped to the United States.
Many of Riskified’s merchants begin working with us on a ‘select and submit’ basis, meaning they only send us orders they’d planned to decline.
Riskified approves nearly 3 out of 4 orders to China and Japan that merchants had planned to decline!
We can salvage 55% of global fashion orders that would have otherwise been declined. The average value of these overturned orders are $694 for high-end and $264 for mid-tier.
When the country where the credit card was issued is the same as the shipping country, this is a great sign of legitimacy.
However, by no means orders with this mismatch should not automatically be rejected: they can still be approved at very high rates.
Orders placed by college students are often mistakenly declined because they follow a classic fraud pattern: Many orders with different names being shipped to the same address. However, orders coming from college IPs are actually safer than others.
For both high-end and mid-tier fashion, orders placed with emails that were created less than three months ago are far more likely to be fraud.
Although safe approval rates are far lower for orders placed using a proxy server, more than half of these orders can be safely approved.
A full AVS match is a nice sign of legitimacy, however over 4 out of 5 orders with no AVS match can still be safely approved.
Friday is the busiest shopping day, with 15% higher order volume than average, while Sundays see 14% fewer orders than average. Safe approval rates on Wednesdays are lower than on Sunday by over one percent.
Fraudsters are impatient, and since they’re not using their own money, they tend to order express delivery.