The tremendous growth of the e-commerce sector does not seem to slow after experiencing a massive hit of $5.7 trillion in 2022. This expansion is leaving retailers anxious, excited, and overwhelmed. However, with rapid growth comes high fraud risks as criminals are concealing their identities and making online purchases. Payment scams, bogus discount offers, money laundering, and minors’ exploitation are other threats to consider by e-commerce platforms.
The massive shift to online shopping is not only increasing convenience for customers but also providing businesses with more revenue-generation opportunities. In this regard, carrying out address verification adds an extra layer of security to e-commerce platforms. This blog covers the challenges online retailers face and how AI-powered online address verification counters them.
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Address Verification System – Countermeasures for E-Commerce Challenges
Obtaining accurate address details and delivering orders to the right customer is the foremost crucial aspect for retailers. On the contrary, failure in doing so will cause chargebacks, failed shipments, additional correction charges, and financial loss. Inefficient, verification of address also negatively affects customer experience as the buyers face delayed or failed deliveries.
Fraudsters use bogus information to trick e-commerce platforms and upon delivery files for illicit chargeback claims. Retailers pay a huge price for fraud attempts and ultimately experience financial instability with a high risk of reputational damage. This makes online address verification a must-have for e-commerce platforms. These AI-powered IDV solutions ensure seamless delivery by limiting data discrepancies.
Accessing the real-time location of customers while making a purchase mitigates failed shipments. The next section discusses prevailing e-commerce challenges and the role of address verification as their preventive measure:
Increasing Shipping Charges
Inaccurate information can be because of various reasons such as fraudsters’ intentions, typological errors, not updated data, and incomplete entries. In all of these scenarios, retailers pay a separate price. As they are dependent on third-party logistics, e-commerce platforms face additional shipping charges due to failed deliveries.
Establishing an efficient address verification system is the solution for e-commerce platforms to save additional shipping costs. The AI-powered IDV services ask customers to upload supporting documents including ID cards, driver’s licenses, utility bills, credit/debit card bills, bank statements, and rental/ownership agreements to cross-validate claims of customers. E-commerce platforms integrating automated IDV tools to verify address can also access the real-time presence of clients while making a purchase.
High Risk of Failed Deliveries
Failed deliveries are one of the most prevalent challenges that e-commerce platforms undergo. With the advent and rapid adoption of online shopping, inaccurate shipments are noticeably increasing. In some cases, fraudsters provide false information to claim chargebacks in the future, while in others data discrepancies are the prime reason. Furthermore, inefficient mechanisms to validate address also lead to failed deliveries.
E-commerce platforms can overcome failed deliveries by integrating AI-powered verifying address solutions. These IDV services automate data entry to eliminate discrepancies. Furthermore, by using OCR to extract information from documents, retailers can restrict the use of bogus details. Online address verification services accelerate faster checkouts, reduce keystrokes, and ensure accurate deliveries.
Accelerating Demand for Free Shipping
E-commerce platforms often provide free shipping to customers within a close radius and also as a discount offer to attract more buyers. In this case, the retailer pays the delivery charges to third-party logistic companies. Therefore, inaccurate verification of address can turn out to be a great deal for e-commerce platforms. Firstly, they will have to pay additional shipping charges from their end, and secondly, this will cause financial instability.
Online address verification enables retailers to come up with more innovative steps for accelerating revenue generation without having to comprise their financial stability. The AI-powered IDV algorithms reduce the burden by automatically extracting, analyzing, and verifying location details. Hence, address verification solutions makes free shipping more feasible for retailers.
Information Correction Fees
E-commerce platforms are sure to face an increase in information correction fees as they lack adequate mechanisms to verify address. When customers do not make updates in their change of location details, retailers pay an additional price for rectifying the data. Furthermore, e-commerce platforms undergo a myriad of charges as they also offer chargebacks and free shipping.
In order to overcome additional correction fees, retailers require efficient address verify solutions. Shippers such as UPS and FedEx charge additional costs for inaccurate details including ZIP codes, apartment numbers, or others. Therefore, by analyzing geolocation online address verification tools themselves correct mistakes.
In the End
Online address verification comes with advanced AI and ML technologies which not only counter data discrepancies but ensure accurate deliveries. Furthermore, by accessing the real-time location of customers, e-commerce platforms can limit fraud risks and use of false information for placing orders. Hence, address verification solutions eliminate unnecessary correction costs, shipping fees, and chargeback claims while ensuring a secure positive customer experience.
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