The short answer
Effective screening combines AVS and CVV checks, velocity limits, geolocation and device signals, and a scoring model that flags for review rather than declining outright. Most merchants lose more to false declines than to actual fraud, so measure both sides before tightening.
Review, do not decline
Sending borderline orders to manual review preserves good revenue that a hard decline destroys silently. A declined good customer rarely returns and never tells you why.
Measure the cost of both errors
Track fraud losses and estimated false declines together. If fraud is 0.1% of revenue and false declines are 3%, your rules are the more expensive problem.
Key takeaways
- False declines usually cost more than fraud
- Flag for review instead of hard declining
- Measure both error types before tuning
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