Online merchant fraud statistics

Here are some statistics that will help benchmark an online merchant's card fraud performance:

> Online sales is expected to grow 20% - 30% per annum.

> 70% of merchants have a direct fraud loss rate of less than 1% of revenue. The average direct fraud loss is 1.8%. Direct fraud loss is measured as a the sum of chargebacks lost and refunds issued with the goods being returned. This does not include the cost of preventing, detecting or managing fraud.

> The average cost of fraud management is around 0.5% of revenues

> 5% of merchants are not using any fraud management tools or processes.

> 55% of merchants use 5 or more tools or processes to manage fraud.

> The size of the average fraudulent order is 1.5 times that of a legitimate order.

> Foreign orders (outside of US and Canada) are 3 times more likely to be fraudulent. The countries that are most likely to originate a fraudulent order are:
- Nigeria
- Indonesia
- Russia
- China
- UK
- France
- Romania
- Mexico
- Vietnam

> The average order flag rate for suspicion of fraud is 6%. About 3/4th of these turned out to be legitimate.

> A quarter of merchants do not use a manual review process for flagged orders.

> An agent can manually review about 20 orders/hour on average. The rate varies from under 10 to nearly 50 orders an hour.