Fight Subscription Fraud With NoFraud + Loop

Fight Subscription Fraud With NoFraud + Loop

The subscription economy is booming. Consumers love the convenience of automatic replenishment for their favorite goods, while businesses reap the rewards of recurring revenue and increased customer loyalty. Unfortunately, when eCommerce grows, fraudsters come knocking. The subscription boom brought a new wave of vulnerabilities (fraud targets) that have forced subscription businesses to take extra measures to protect the customer experience and revenue.

As subscriptions businesses have seen significant growth over the past five years — more than doubling in sales between 2019 and 2023 — they are also noticing an increase in fraud. In 2023, 60% of subscription companies reported an increase in fraudulent activity.

Fraudsters are constantly evolving their tactics and finding new ways to exploit any gaps a business may have. So when a business expands into a new channel, it signals an opportunity for scammers to find ways to take advantage of any system or process vulnerabilities. Here is what fraudsters are thinking about when they’re analyzing subscription businesses as potential fraud targets:

1. Subscriptions mean your products are in high demand. When customers opt-in to subscribing to a product, it means the product is easy for fraudsters to resell. They will target subscription businesses during seasonal peaks and holidays to place a high volume of orders in an attempt to bypass security measures and fly under the radar. Fraudsters will use stolen credit cards to stock up on these products so they can resell them on a third-party marketplace or on a fake website (triangulation fraud).
   
   If you’ve noticed copycat websites pop up, check out How to Take Down a Fake Website.
2. Subscriptions mean your customers trust and love you. Nothing is stronger than the power of customer love for a subscription brand. For fraudsters, they’re thinking that these customers have a set-it-and-forget-it approach in their relationship with their favorite subscription brands. Fraudsters take advantage by performing account takeovers, an effort to exploit the legitimate shopper’s credible transaction history to execute attacks before the account owner notices or takes action. They may change account details to lock out the account owner, exploit the subscription for their benefit, or sell the account credentials.
3. Subscriptions mean you have new technology. Fraudsters know that new technology means there’s a high likelihood that kinks between systems aren’t fully fleshed out. It’s important to make sure your subscription platform and other integrations are effectively passing details that help identify and prevent fraud. Make sure your eCommerce tech stack is still passing IP addresses, rebills are reviewed, and subscription reactivations are screened.

To learn more about how to fight subscription fraud, check out How to Protect Your Business From Subscription Fraud.

To combat this growing threat, eCommerce brands need robust solutions. That’s where NoFraud and Loop come in.

Loop is a Shopify subscriptions app that offers DTC brands a comprehensive solution to drive revenue and enhance customer engagement. With its fully customizable customer portal, bundle builder, and subscription flows Loop enables brands to craft tailored experiences for their customers. Using Loop’s gamified features, brands can integrate social media content in the exit surveys to reduce cancellations and boost retention. Customers rate Loop five stars for its technology and support. The app also offers free white-glove migration from other subscription apps.

 Current NoFraud customers can explore details of our integration here.

Subscription brands that use the power of NoFraud and Loop together are able to confidently grow their business without sacrificing profitability. 

The NoFraud and Loop partnership offers several key benefits:

• Reduce manual review: Automate fraud screening to save time and resources.
• Increase transaction approval rates: Boost revenue by reducing false declines.
• Cut chargeback costs: NoFraud’s chargeback guarantee provides peace of mind.
• Automate business policy enforcement: Prevent resellers, reshippers, and loyalty abuse.
• Proactive fraud protection: Automatically cancel fraudulent subscriptions.

Popular brands offering subscriptions like Füm, Sullen Clothing, and Steel Supplements have already benefited from the NoFraud and Loop partnership. By implementing these solutions, they have been able to effectively protect their subscription businesses while driving growth. 

The subscription economy presents a tremendous opportunity for ecommerce businesses. However, it’s essential to be aware of the risks associated with subscription fraud. By partnering with NoFraud and Loop, merchants can protect their bottom line, enhance the customer experience, and achieve long-term success. Both NoFraud and Loop offer free 14-day trials for merchants curious to test the power of both platforms. For more information, schedule a chat with NoFraud or schedule a chat with Loop.