Enterprise fraud management: Finding a strategy that works for your business

May 28, 2025

Enterprise fraud management is a balancing act. On one end of the scale, there’s locked-down security — after all, the only way to eliminate digital fraud 100% is to run your business entirely offline. The opposite approach would involve no verification at all, allowing people to log in with a simple username, which is friction-free but unsafe.

By finding the perfect points to add friction to the customer checkout journey, you can create an experience that achieves all your objectives. To strike such a balance — preventing the damage of fraud while keeping your customers happy — you need a unique enterprise fraud risk management strategy tailored to your business.

Ease vs. protection: The ideas behind enterprise fraud prevention

Financial fraud perpetrated by organized groups of cybercriminals loses businesses millions of dollars every year, alongside the reputational damage caused by these attacks. Financial loss to digital fraud in the eCommerce space totaled $44.3 billion in 2024, and the figure is expected to rise to $107 billion annually by 2029 due to more advanced attack methods. [1]

The key concept in enterprise fraud risk management is friction. How many instances of friction should your customers experience when dealing with your online services?

You can intentionally help protect the customer journey by:

• Asking a customer to re-enter a card’s CVV code.
• Requiring two-factor authentication through methods like 3D Secure.
• Implementing automated certifications, such as Address Verification Service (AVS) checks.

Creating an enterprise fraud management strategy involves deciding where to place these potential obstacles. While no longer the be-all, end-all of fraud defense in today’s era of heavy automation and machine learning, these touchpoints are still essential considerations.

Some online merchants strive to use fewer checks, creating a friction-free commerce experience inspired by Amazon’s one-click ordering. However, while Amazon is a multibillion-dollar large enterprise and may be capable of absorbing financial loss brought on by its smooth experience, smaller businesses can suffer unacceptable damage to their bottom lines.

Other businesses that overcorrect and implement too many points of friction may struggle to create a positive customer experience, with many manual verification points leading to frustration and high cart abandonment rates. The weaknesses of both extremes show why it’s important to balance security with ease.

The state of fraud: What to watch for and to protect against

Running any online business means facing a variety of threat types. On one hand, your organization will have to deal with small-scale abuses of your services perpetrated by customers dealing with buyer’s remorse or who think they’re committing a victimless crime. This is referred to as first-party misuse or “friendly fraud.” On the other, there are large-scale attack types executed by organized criminal organizations.

Specific, prominent types of fraud threats to factor into your prevention strategy include:

Organized fraud

• Stolen payment card fraud: Criminals using stolen, leaked, or hacked payment card information to make mass purchases, potentially to sell the merchandise later.
• Card testing: A fraudster completing small transactions with stolen card information, testing it to determine whether it will function for larger purchases.
• Gift card fraud: Perpetrators taking advantage of gift cards, making purchases with fraudulently obtained store credit.
• Account creation fraud: Organized fraudsters creating new accounts using stolen, combined, or wholly fictional customer details and then leaving the accounts unused long enough for them to not trigger restrictions on newly created profiles.

First-party misuse

• Discount or coupon abuse: Users attempting to reuse discounts, credits, or other sources of value, potentially by making small changes such as formatting email addresses differently.
• Bad-faith chargeback abuse: Buyers making purchases and disputing the charges, marking the reason as “fraud” to receive refunds while keeping the goods.
• Reselling and re-shipping abuse: Resellers buying goods from a company in contravention of its policies against resale, potentially to introduce goods to off-limits territories.
• Return abuse: Shoppers abusing loopholes in return policies to earn refunds on goods that shouldn’t be eligible for them. This issue is growing fast and accounted for nearly $102 billion of fraud loss in 2023. [2]

These risk factors vary in pervasiveness between industries, and some businesses are particularly susceptible to fraud. Industries with a special need for tailored fraud management strategies include:

• Travel: Loyalty points systems serve as potential targets for abuse and high-ticket purchases are common.
• Retail: Products purchased from retailers can be targets of opportunity for large-scale fraudsters who aim to resell the goods, or for simple first-party misuse when customers suffer from buyer’s remorse.
• eGaming: Sign-up bonuses are common in eGaming, leading to account creation attacks, while fraudsters may also attempt to play with stolen payment card information.
• Delivery services: Companies in the delivery and logistics space need to be on guard against all types of return and refund fraud.

While the exact methods of protecting each business will vary, the building blocks are the same: good enterprise fraud management comes from technology and human effort combined.

Tech and human approaches: Tuning fraud prevention for your business

Contemporary technologies, including machine learning and artificial intelligence, are key elements in giving your business the ability to implement the right amount of friction to stop fraud without introducing excessive roadblocks for legitimate customers. These systems can’t reach their potential without the careful application of human intelligence, however.

In a well-designed system, the two sides of fraud protection will complement each other:

• Digital systems: Cutting-edge technological tools use two main methods to detect fraud. The first consists of digital tools that enforce specific policies. This means using a list of commonly observed attack patterns to automatically shut down potential fraud that fits common patterns. The second uses machine learning, an adaptive methodology that evolves over time, learning signs of potential fraud such as discrepancies between expected and actual user locations and enabling preemptive action against new and novel risks.
• Human intelligence: People can have a direct hand in fraud prevention by choosing where to place points of friction in the customer journey, all based on a company’s industry, size, location, and other factors. By determining which types of attacks are most common and damaging for the specific business, human experts can implement the verification and authentication methods most likely to trip up fraudsters.

Your organization’s ideal fraud protection strategy is one that reflects your company’s size, margins, industry, customer base, region, and general risk appetite. By identifying your riskiest 1% of transactions through a combination of data collection and human insight, you can apply friction where it matters and create a smooth experience for most shoppers.

Build a suitable enterprise fraud management solution

So, how do you create a fraud management system that incorporates advanced technology but is built by human intelligence? Ideally, you work with an industry-leading platform like Accertify; one whose provider will listen to your needs, study the current state of fraud affecting your operations, and build out a tailored solution that suits you.

The resulting offering will put friction in the right place, whether that means a special focus on account creation, the login process, returns, or any other part of the customer journey. The digital rules and advanced machine learning tools underlying these solutions can detect threats with minimal interference, ensuring that friction never becomes excessive for customers.

Accertify stays engaged with companies following initial contact. A team of consultants will assist with areas like system architecture and strategic risk management, fine-tuning the project to ensure the balance between friction and ease is perfect.

Get ready to deploy a mature enterprise fraud management solution that suits your business perfectly: Learn more about the Accertify Fraud Detection Platform.

[1] Juniper, 2025

[2] PYMNTS, 2024