--- title: How to measure the success of your fraud prevention tools date: 2023-09-12T09:30:00+01:00 author: Nick Lally canonical_url: "https://www.ravelin.com/blog/success-of-fraud-prevention-tools" section: Blog --- Blog /[Machine learning & AI](/resources?search=&category%5B0%5D=134549#resourceContainer "Go to Machine learning & AI"), [Ravelin University](/resources?search=&category%5B0%5D=257999#resourceContainer "Go to Ravelin University") # How to measure the success of your fraud prevention tools Fraud prevention is a delicate balance between stopping fraud and maintaining good customer experiences. But what is the most effective way to measure this outcome? 12 September 2023 ![How to measure the success of your fraud prevention tools](https://storage.googleapis.com/ravelin-website-assets-production/assets/images/_blogSmall/188066/237_Success_of_fraud_tools_Blog_885x505.webp) Our research shows that all major fraud types are on the rise. And, to put it plainly, you can’t afford to get complacent. So it’s promising to see that [75% of fraud teams expect their budgets to increase](https://pages.ravelin.com/fraud-and-payments-survey-2023). This investment includes fraud prevention technology, but how can you ensure your money is being well spent? There’s little consensus between merchants on the most effective tool for fighting fraud. But, in truth, different solutions are effective at fighting different types of fraud. What’s important is that you have a robust tool stack and strategy that takes into account the dynamic nature of fraud – all without frustrating customers. Fundamentally, a solid fraud prevention strategy stops fraud without disrupting customer experiences. Here, we'll help you identify ways to measure the impact of your fraud solutions on both sides of this coin. ## Is your fraud prevention tech preventing fraud? ![Fraud Prevention Tools](https://storage.googleapis.com/ravelin-website-assets-production/assets/images/Fraud-Prevention-Blog.png)It’s important to understand whether your strategy is actually helping you identify and prevent fraud. Largely, this means looking at metrics related to the impact of fraud on your business as a whole. Critical metrics to consider when evaluating your [fraud detection solutions](https://www.ravelin.com/solutions) and strategy include review rate, block rate, chargeback rate and losses to fraud. ### **1. Review rate** This is the percentage of transactions that are manually reviewed by your fraud team. Manual review is costly, and a high manual review rate would suggest that you're not allocating resources effectively.[ Manual review](https://www.ravelin.com/blog/are-you-spending-too-much-time-on-manual-review) is most effective as a last defense against fraud to avoid false positives. You should only have to manually review orders that are difficult to decide on. Otherwise, transactions that incur a medium fraud score could be sent through 3DS. ### **2. Prevent/block rate** Also called a block rate, this is the percentage of transactions that are prevented due to suspected fraudulent activity. This is a slightly more complex metric and would very much be determined by your organization's risk appetite. A high prevent rate would mean you're stopping a lot of fraud. But some genuine customers are likely to get caught up in the net and have their payments prevented, i.e. false positives. On the other hand, a low prevent rate would suggest better precision, but you’ll probably end up letting some fraud through. An effective fraud prevention tool should try to balance the above and take into consideration your business goals. Your prevent rate should scale with fraud attacks and minimize false positives. ### **3. Chargeback rate** This is the percentage of transactions that resulted in a chargeback. A high chargeback rate is often a sign of high fraud levels or machine learning models with [poor recall](https://www.ravelin.com/insights/machine-learning-for-fraud-detection#settingtherightriskthres). In other words, your risk threshold is so high you’re not effectively stopping fraud. A good fraud prevention strategy should [balance your prevent/block rate against your chargeback rate](https://www.ravelin.com/blog/how-to-showcase-the-business-impact-of-machine-learning-for-fraud) to maximize revenue but minimize risk. ### **4. Fraud losses** This is the total costs incurred by your business due to fraud. This can include lost merchandise, shipping costs, and chargeback/dispute fees. It can also include indirect losses like reputational damage. Tracking fraud losses can provide insight into the effectiveness of your strategy and the return on investment of your tools. ## How is your fraud prevention impacting customer experience? ![Fraud Prevention Technology](https://storage.googleapis.com/ravelin-website-assets-production/assets/images/Fraud-Prevention-Blog1.png)Fraud prevention and providing great customer experience aren’t separate aims. If anything, a good fraud prevention strategy has the customer journey in mind and *enhances* their experience. This involves [being strategic about where you add friction](https://www.ravelin.com/podcast/food-delivery-marketplace-fraud-with-shawn-colpitts). For example, adding verification steps to account creation has a far lower impact on conversion than verification steps at check-out. When it comes to reviewing the impact on customer experiences, there are two critical metrics you can look at ### **a. False positive rate** [False positives](https://www.ravelin.com/blog/success-of-fraud-prevention-tools) are legitimate transactions mistakenly flagged as fraud. Different industries and businesses will have different acceptable false positive rates. However, in all cases, false positives are terrible for customer experiences. You’ve lost a genuine sale and potentially a loyal customer. Which you absolutely don't want to do. ### **b. Abandonment rate** Cart abandonment is a good indicator of too much friction at check-out. An effective fraud prevention strategy is about finding that sweet spot. Communication is also invaluable here; help your customer understand why they need to take these extra steps. ## The true value of fraud prevention The role of your fraud team and tools is to help the business see where its risks are, what its mitigation options are, and anticipate problems before they arise. Your fraud prevention strategy should be looking to answer the question – how can we combat fraud without harming good customers? Your business, your customers and your fraud risks are unique. This is why bridging the gap between strong fraud prevention and good customer experience can be a challenge. The hallmark of a good fraud prevention strategy is using all of the tools at your disposal in ways that work for your business. When trained on your customer data and your business data, [machine learning](https://www.ravelin.com/insights/machine-learning-for-fraud-detection) is a highly effective and highly scalable tool to spot patterns that could otherwise be missed. Rules can then be used as a supplementary measure to quickly stop attacks with patterns that the model may have not seen before. Manual reviews remain necessary to limit false positives. And graph networks can play an important role here by visualizing large volumes of data to quickly investigate these complex cases. [Read our customers' success stories with Ravelin's fraud detection solutions.](https://www.ravelin.com/customers) ![Ravelin Logo](https://storage.googleapis.com/ravelin-website-assets-production/assets/images/ravelin-symbol-logo-transparent.webp) ## Sign up for Ravelin's newsletter Get new data, insights and developments in fraud and payments every month Sign up here ## Author ![Nick Lally](https://storage.googleapis.com/ravelin-website-assets-production/assets/images/_avatarSmall/261233/nick-lally.webp) Nick LallyCFO & Co-Founder Nick Lally is a fintech founder and chartered accountant with over two decades of experience in financial strategy and scaling technology businesses… [More from this author](https://www.ravelin.com/author/nick-lally) ## Related content [Blog / Payments & payment fraud ### Card payment liability shift – everything you need to know to reduce chargeback burden The knowledge you need to make the most of liability shifts and reap the benefits for your company – including saving money on chargebacks. ![Freddie burgess](https://storage.googleapis.com/ravelin-website-assets-production/assets/images/_33x33_crop_center-center_none_ns/281707/freddie-burgess.webp)Freddie Burgess,Senior Product Support Analyst](https://www.ravelin.com/blog/card-payment-liability-shift-for-chargebacks) [Blog / Fraud analytics ### Refund abuse KPIs: How to measure and reduce refund fraud rates What you need to know to assess and quantify refund abuse – as well as to measure whether your refund abuse solution and strategy are delivering results. ![Can](https://storage.googleapis.com/ravelin-website-assets-production/assets/images/_33x33_crop_center-center_none_ns/280078/can.webp)Can Colak,Senior Product Manager](https://www.ravelin.com/blog/how-to-measure-refund-abuse-kpis) [Blog / Press release ### Driven by AI, customers now rival criminals for ecommerce fraud, say merchants Global ecommerce fraud enters a new phase as losses continue to climb. Merchants now view criminals and their own customers as presenting a comparable risk, and there's a gap in AI adoption. ![Ravelin Symbol Blue 1](https://storage.googleapis.com/ravelin-website-assets-production/assets/images/_33x33_crop_center-center_none_ns/187712/Ravelin-Symbol-Blue-1.webp)Ravelin Technology](https://www.ravelin.com/blog/ravelin-fraud-survey-2026-press-release)