Fraud filters are supposed to block risky transactions, not good customers. But if your settings are too tight, you're turning away real buyers. If your approval rate has dropped or chargebacks haven't budged, your filter might be working against you. Here's how to spot the signs before you lose more sales.
1. Approval Rates Are Low, but Chargebacks Haven't Improved
A drop in approval rate usually means your fraud system is flagging more orders. That's fine if fraud attempts are spiking, but if your chargeback rate stays the same, something's off. It often means you're rejecting valid transactions without stopping any actual fraud. You're losing revenue with no upside.
2. Customers Say Their Cards Keep Getting Declined
When support tickets start piling up with messages like "My payment won't go through," it's time to pay attention. Most buyers won't contact you. They'll just give up and go to a competitor. A few complaints usually mean many more abandoned carts you'll never hear about.
3. Legit Orders Get Flagged for Manual Review
Some orders should trigger reviews. But if you're constantly reviewing regular purchases, like returning customers or standard orders from safe locations, your filters might be too aggressive. This wastes time and delays fulfillment, making it harder to scale.
4. High Decline Rates in Low-Risk Regions
Countries like the US, Canada, and most of Western Europe are generally low-risk. If you're rejecting a large portion of orders from these places, your settings may be tuned for the wrong threat model. You could be blocking safe orders based on outdated or overly broad rules.
5. A/B Testing Shows Higher Sales Without the Filter
If your fraud tool allows A/B testing, check performance with and without certain filters. If the variant with fewer rules brings in more sales and doesn't spike fraud, that's a clear signal your current setup is too strict. Merchants often leave easy money on the table because they're afraid to adjust.
6. Too Many Filters Running at Once
It's easy to stack multiple filters like velocity checks, IP matching, device fingerprinting, AVS, CVV, 3DS, but using them all at once can create conflicts. A good order might pass most checks but fail one minor rule. When that happens, it's often safer for the system to decline it, even if the overall risk is low.
7. Rules Haven't Been Updated in Months
Fraud evolves quickly. What worked six months ago might be outdated now. If you set rules and forgot about them, they may no longer match current fraud trends or buyer behavior. Rigid filters with no feedback loop become less useful over time.
Final Takeaway
A fraud filter should stop the bad actors, not frustrate your real customers. If your chargebacks aren't dropping, but your sales are, it's probably time to reevaluate your setup. Look at the data, run tests, and make small adjustments. Don't let fear of fraud cost you legitimate revenue.
FAQ: Signs of a Strict Fraud Filter
How do I check if my fraud filter is blocking real customers?
Start by looking at your approval rate, customer complaints, and manual review logs. If you see a high decline rate with no drop in fraud or chargebacks, you may be rejecting safe orders. A/B testing or temporarily disabling filters can also help reveal problems.
Can strict filters trigger payment processor issues?
Yes. Some payment processors monitor decline patterns. If you reject too many valid transactions, it can raise your risk profile and even lead to account holds or higher fees.
How often should I review my fraud rules?
At least once a quarter. Fraud patterns change fast, and buyer behavior shifts with seasons, product types, and even news cycles. Keeping your rules current helps avoid both fraud and false declines.
Is manual review better than auto-decline?
It depends. Manual review adds cost and delays but can save legitimate sales. Auto-decline is faster but riskier if your filters are too strict. A mix of both, guided by good data, usually works best.
Don't Let Over-Filtering Become Your Real Fraud Risk
Chargeblast helps merchants reduce chargebacks without blocking real customers. Our system focuses on smart dispute prevention, not just blanket rules. Instead of punishing good buyers, we help you fight the chargebacks that matter. Try it today and protect your revenue the right way.
