Strategies to Maximize Conversion and Reduce False Declines

by Kim Le 5 min read October 7, 2024

Online fraud has increased exponentially over the past few years, with the Federal Trade Commission (FTC) data showing that consumers reported losing more than $10 billion to fraud in 2023. This marks the first time that fraud losses have reached that benchmark, and it’s a 14% increase over reported losses in 2022. As a result, e-commerce merchants and retailers have reacted by adding friction to e-commerce interactions.  

The risk is that a legitimate user may be denied a purchase because they have incorrectly been labeled a fraudster — a “false decline.” Now, as the holiday shopping season approaches, e-commerce merchants expect a surge in online spending and transactions, which in turn creates concern for an uptick in false declines.  

In a recent webinar, Experian experts Senior Vice President of Business Development and eCommerce Dave Tiezzi and Senior Director of Product Management Jose Pallares explored strategies for how e-commerce merchants can determine the risk level of a transaction and ensure that they do not miss out on genuine purchases and good customers.

Below are a few key perspectives from our speakers: 

What are the biggest challenges posed by online card transactions? 

DT: One of the biggest issues merchants face is false declines. In the report, The E-Commerce Fraud Enigma: The Quest to Maximize Revenue While Minimizing Fraud Experian and Aite-Novarica Group (now Datos Insights) found that 1.16% of all sales are unnecessarily rejected by merchants. While this percentage may seem small, it represents significant revenue loss during the high-volume holiday shopping season. The report also highlights that 16% of all attempted online transactions encounter some form of friction due to suspected fraud. Alarmingly, 70% of that friction is unnecessary, meaning it’s not preventing fraud but instead disrupting the purchasing process for legitimate customers. This friction translates into a poor online shopping experience, often resulting in cart abandonment, lost sales and a decline in customer loyalty. 

What are the key consumer trends and expectations for the upcoming holiday season? 

DT: Experian’s 2024 Holiday Spending Trends and Insights Report reveals that while 35% of holiday shopping in 2023 occurred in December, peaking at 9% the week before Christmas, Cyber Week in November also represented 8% of total holiday sales. This highlights the importance for merchants to be prepared well before the holiday rush begins in November and extends through December. As they gear up for this high-volume season, merchants must also prioritize meeting consumer expectations for speed, ease and security—which are top-of-mind for consumers. According to our 2024 U.S. Identity & Fraud Report, 63% of consumers consider it extremely or very important for businesses to recognize them online, while 81% say they’re more trusting of businesses that can accomplish easy and accurate identification. They’re also wary of fraud, ranking identity theft (84%) and stolen credit card information (80%) as their top online security concerns. Considering these trends, it’s important for merchants to ensure seamless and secure transactions this holiday season.  

False declines are a persistent problem for e-commerce merchants, especially during the holidays. How can merchants minimize these declines while protecting consumers from fraud? What best practices can merchants adopt to address these risks? 

JP: False declines often result from overly cautious fraud detection systems that flag legitimate transactions as suspicious. While it’s essential to prevent fraud, turning away legitimate customers can severely impact both revenue and customer satisfaction.

To minimize false declines, merchants should leverage advanced fraud prevention tools that combine multiple data points and behavioral insights. This approach goes beyond basic fraud detection by using attributes such as customer behavior, transaction patterns and real-time data analysis. Solutions incorporating NeuroID’s behavioral analytics and signals can also better assess whether a transaction is genuine based on the user’s interaction patterns, helping merchants filter out bad actors and make more informed decisions without disrupting the customer experience.

What actionable strategies should e-commerce brands or merchants implement now to reduce cart abandonment and ensure a successful holiday season? 

JP: One of the most effective tools we offer is a card ownership verification solution designed to reduce false declines while protecting against fraud. Experian helps e-commerce merchants and additional retailers accurately assess transaction risk by answering a key question: Does this consumer own the credit or debit card they presented for payment? This ensures that legitimate customers aren’t mistakenly turned away while suspicious transactions are properly flagged for further review. By adopting a multilayered identity and fraud prevention strategy, merchants can significantly reduce false declines, offer a frictionless checkout experience and maintain robust fraud defenses—all of which are essential for a successful holiday shopping season.  

Are there any examples of a retailer successfully leveraging credit card owner verification solutions? What were the results? 

JP: Yes. We recently partnered with a leading U.S. retailer with a significant online presence. Their primary goals were to reduce customer friction, increase conversion and identify their customers accurately. By leveraging Experian’s card ownership verification solution and its positive signals, the retailer could refine, test and optimize their auto-approval strategies. As a result, the retailer saw an additional $8 million in monthly revenue from transactions that would have otherwise been declined. They also achieved a 10% increase in auto-approvals, reducing operating expenses and customer friction. By streamlining backend processes, they delivered a more seamless shopping experience for their customers.  

Stay ahead this holiday season 

For more expert insights on boosting conversions and enhancing customer loyalty, watch our on-demand webinar, Friction-Free Festivities: Strategies to Maximize Conversion and Reduce False Declines, hosted by the Merchant Risk Council (MRC). Additionally, visit us online to learn more about how Experian’s account ownership verification solution can transform your business strategy.

Watch on-demand webinar Visit us

The webinar is available to MRC members. If you’re already a member, you can access this resource here. Not a member? Our team would be happy to schedule a demo on Experian’s account ownership verification solution and discuss strategies to help your business grow. Get in touch today.

Related Posts

Building for Bots in the AI Age: Separating Legitimate Agents From Fraudsters

See how NeuroID helps businesses distinguish legitimate AI agents from fraud bots, while Agent Trust verifies agent-initiated transactions.

October 29, 2026 by Laura Burrows
2026 Retail Banking Identity and Fraud Report 

Learn how banks can convert rising fraud investment into protection customers recognize, value and feel in our recent report. Read more!

October 28, 2026 by Laura Burrows
One Platform, Fewer Handoffs, Faster Decisions

The average credit union manages between 100-300 vendor relationships, and nearly a third have no dedicated staff managing them. What was supposed to drive efficiency is stunting growth and compromising the member experience. Application volume is continuing to rise, and consumers expect a loan decision at digital speed. But for credit unions, meeting that expectation isn't the only goal. They must also continue to make the right lending decisions while also prioritizing risk management. The institutions pulling ahead aren't the ones with the most tools. They're the ones that have turned credit, fraud and decisioning into a single, coordinated system. A single loan decision touches: Credit data Identity verification Fraud signals Decisioning logic Reporting Rarely does all of that live in one place. More often, it’s stitched together across separate platforms, each with its own contract and its own support line. When a credit view and a fraud view are generated separately, they must be reconciled instead of read together in the same instant. Every handoff is a place where a decision slows down and a signal gets missed. It's why a fraud pattern that would be obvious next to the credit file often surfaces only after the funds are already gone. Fragmentation also makes it harder to optimize lending strategies over time. When data, analytics and decisioning are disconnected, credit unions have less visibility into what's working, what's changing and where strategies need to be adjusted. An integrated decisioning ecosystem closes those seams by design, with credit, fraud and lending strategy running on one platform and accessed through a single Application Programming Interface (API). Identity and compliance capabilities can be an integrated decisioning flow. The data doesn't need to be reconciled after the fact because it was never separated in the first place. Stop overengineering, start removing friction When decisioning underperforms, the instinct is to build something more custom: a proprietary model, tighter segmentation, more configuration.  Custom modeling has its place for institutions with the scale and data to justify it. But often, for small or mid-sized credit unions, the bigger opportunity is a flexible decisioning strategy that uses a strong, continuously refreshed model. This shouldn't be either/or. The right approach gives credit unions a strong decisioning strategy today, with the ability to introduce more customized analytics and modeling as their needs evolve.  The same principle applies to strategy management: credit unions can gain greater control through self-service capabilities as they build a more sophisticated data science team.   That kind of flexibility is important as credit unions modernize their decisioning infrastructure. Research surveying more than 2,000 senior credit risk and fraud decision-makers across 11 countries found that organizations investing in unified platforms and modern infrastructure are moving faster and realizing the greatest Return on Investment (ROI).   As their needs evolve, credit unions can adjust decisioning strategies without introducing another layer of technology or relying on third parties to make every change. Until self-service is the right fit, choose a partner that understands what makes your credit union’s membership and risk appetite different from others.  Same member, same afternoon, faster answer Consider a credit union growing its auto and personal loan originations.  A member applies for an auto loan on Saturday afternoon. Credit data, identity and fraud signals are read together in a single real-time pass instead of separate reviews:  Most applications resolve immediately, approved or declined based on a more comprehensive view of the applicant. A smaller number are flagged for quick step-up verification and cleared within minutes. Only genuinely ambiguous cases reach an underwriter, who is working from one complete picture instead of reconciling multiple signals. The member has an answer before the weekend is over. The credit union books the loan before competitors even open on Monday. Built to scale This kind of process holds up today. However, the better test is whether it holds up eighteen months from now when application volume has grown, new products are live and the data flowing through the system looks nothing like it does right now. Future-proofing isn't only about handling more volume. It's about having room to be nimbler and make adjustments as quickly as the market changes. A credit union that relies on standard models within a decisioning strategy may want more customized analytics and greater control over its strategies tomorrow. Connect with us With more than three decades of credit expertise and one of the industry's largest data footprints, Experian helps credit unions do more than solve this year's friction. We're helping to build a decisioning foundation that scales, so growth becomes something the system absorbs, rather than something it must be rebuilt around. Explore More

October 21, 2026 by Zohreen Ismail

Subscribe to our Newsletter

Enter your name and email for the latest updates.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Subscribe to our Newsletter

Don't miss out on the latest industry trends and insights!
Subscribe