How retailers can fight fraud without compromising customer experience


Ryan Kemp, Director of Retail at TransUnion in the UK explores what retailers should be doing to combat the ever-evolving fraud threat

How do you keep your customers’ information secure and prevent fraudulent transactions whilst maintaining that ever-important smooth checkout experience?

Our philosophy here at TransUnion is ‘friction-right’ design. This means ensuring customers have an appropriate level of security to trust that their transaction is safe, without impeding a seamless checkout.

In our recently released Consumer Credit 2020 report, one of the key findings was the importance consumers place on trust when choosing a product provider. When it comes to financial products, it’s the primary driver for that decision for more than a third of consumers, and the same principles apply when it comes to retail.

Consumers are increasingly protective of their personal information and sceptical of those who want to use it, but they don’t want to compromise their customer journey. Making this journey as efficient, user-friendly and ‘friction-right’ as possible helps retailers to build trust, lessen basket abandonment and reduce the risk of fraud.

The checkout journey provides a natural feedback loop, so optimising this process will help retailers to keep pace with evolving threats and maintain trust.

It can be broken down into five simple and connected steps where solutions can be implemented:

Sign up

Improving the sign-up process so it’s fast, smooth and reduces fraud risk is essential. Retailers should deploy multilayered fraud solutions and design forms that need only the minimal number of fields and a limited amount of customer input. To do this, solutions needs to combine traditional data points and non-intrusive device and risk verification checks, whilst also harnessing data attributes, such as device history, network operator, e-mail characteristics and detection of an anomaly or VPN.

Account login

How we authenticate is changing. Educating customers about account safety, such as the importance of unique and strong passwords to protect themselves from account takeovers (ATOs) is essential. TransUnion’s research revealed that just one in five adults (22%) use a new password for each account and only 38% check for the SSL padlock or https sign on a website. Alternative verification methods, such as a pin code and biometric combination, can provide additional protection, while also complying with forthcoming PSD2 Strong Customer Authentication (SCA) regulation. Beyond this, TransUnion encourages retailers to invest in a device intelligence platform to allow specific rules per risk profile; further minimising fraud risk.

Loyalty and offers

Inconsistency is a big clue when spotting fraud, so having a comprehensive and single view of the customer is the best protection. One of the challenges retailers face is promotional abuse; often related to discounts for first-time buyers and one-use promotional codes. Using device data will help identify whether a ‘new’ customer is genuine and prevent misuse of offers and incentives.


Preventing fraud and recovering losses is a cost-effective strategy for businesses to increase their bottom line, so knowing what to look for is essential. For example, stolen credit cards are often tested using small online purchases before a larger transaction, so it’s important to know that that basket size is irrelevant and treat all fraud as equally important, using robust checks to identify risks. But be careful of false positives. Declining legitimate transactions could end the customer relationship, so advanced solutions that can identify different risk tiers will be invaluable.


The risks of fraud don’t end once the purchase is complete. Post-sale fraud can be costly and includes the likes of ‘wardrobing’ – where consumers plan to return something after single use. Using intelligence that links customers with their devices at the start of the process is imperative in tracking the customer journey, so that high-risk behaviours can be identified and flagged. Rules can then be implemented, ensuring genuine customer returns aren’t impacted and the best possible customer service is maintained.

To find out more download our ecommerce fraud playbook here.

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