Fraud filters are supposed to protect your business. But sometimes, they get in the way of it. Maybe a good customer can’t check out. Maybe your decline rate creeps up, and you’re not sure why. The tools meant to block fraud can just as easily block sales when they’re set up too tightly or left unchecked.
If your fraud filter is costing you money instead of saving it, here’s where things tend to go off track, and what you can do to fix it.
What Fraud Filters Actually Do (and Why They Get It Wrong)
Fraud filters scan every transaction for red flags. They check whether the billing address matches the card, how fast someone’s buying, what IP they’re using, and more. The problem? These filters aren’t perfect. They follow rules. They don’t know if your customer is on vacation or just typed their ZIP code wrong.
Most of the time, fraud filters are too aggressive. One mismatch or slightly unusual pattern can stop a valid sale cold. And once you start layering filters (AVS, CVV, IP blocks, velocity rules), it’s easy to lose track of which one is doing the damage.
The Most Common Filter Mistakes That Block Real Buyers
1. Blocking on AVS and CVV Mismatches Alone
AVS (address verification) and CVV (card verification value) checks are basic fraud tools. But they’re not always reliable. Customers mistype addresses. Some banks don’t support AVS at all. And international transactions often fail both checks, even when they’re legit.
If you automatically reject a transaction just because the ZIP code or security code doesn’t match, you’re going to lose good orders, especially on mobile, where it’s easy to make small mistakes.
What to do instead: Let the transaction through unless there are multiple red flags. AVS and CVV should be part of your decision-making, not the only reason you decline.
2. Using Velocity Rules That Are Too Tight
Velocity filters track how often a buyer is trying to place an order. They’re meant to catch bots and stolen card tests. But shoppers don’t always act the way you expect. Maybe they placed one order, forgot something, and came back five minutes later. Or maybe their card failed, so they retried.
If your settings block a second attempt from the same card or IP within a short window, you’re likely turning away real customers.
What to do instead: Use velocity filters to slow things down, not shut them off. Add friction, like a CAPTCHA or email verification, instead of blocking outright.
3. Blocking Entire Countries or IP Ranges
This one’s common, especially after fraud from a specific region. It feels safer to just block all orders from a country or IP block. But that can backfire. Many buyers use VPNs. Remote teams place orders from shared Wi-Fi. Some of your most loyal customers could be traveling.
And IP-based blocks are messy. The same IP address can belong to hundreds of people, especially in corporate or public settings.
What to do instead: Score international orders, don’t block them. Use device fingerprinting and behavioral data to help you decide whether to trust the order.
4. Ignoring Device and Browser Patterns
Filters that rely only on static data, like billing info, miss a lot. What about the device the customer is using? Is it one they’ve used before? Is their browser doing anything strange, like blocking scripts or spoofing settings?
These signals help you tell the difference between a real customer and an automated attack. If you’re not factoring in device or behavior data, you’re relying on a very limited view.
What to do instead: Combine your filters with fraud scoring that includes device history and customer behavior. The more context you have, the fewer mistakes you’ll make.
5. Never Reviewing What Gets Blocked
The biggest mistake is assuming your filter is working just because fraud is low. If you’re not reviewing declined orders or tracking lost sales, you’ll never know what it’s costing you. You might have a 0.2% fraud rate and a 5% cart abandonment rate; those things could be connected.
Your filters could be blocking returning customers who mistyped their billing info. Or buyers with VPNs. Or international shoppers who don’t understand why their order keeps failing.
What to do instead: Review declines every week. Look at what rule triggered the block. Check support tickets for checkout issues. If your fraud rate is low but conversion is dropping, your filter might be overdoing it.
How to Tell When You’re Blocking Good Customers
Here’s how to spot the warning signs:
- Declined transactions increase even though fraud rates don’t.
- Customers complain about their orders not going through.
- Support sees more tickets about failed payments or double charges.
- You notice repeat buyers disappearing with no explanation.
If you’re seeing these, it’s time to dig into your logs. What rules are firing most often? Are you blocking on AVS mismatches alone? Are too many international orders being flagged?
Run test orders from different IPs, browsers, and cards. You might be surprised by what gets stopped.
Conclusion
Fraud filters are a tool. Not a solution on their own. When they’re tuned right, they save you money and protect your business. When they’re off, they quietly chip away at your revenue by blocking the people you actually want to sell to.
If you’re not actively reviewing your fraud rules, you're flying blind. Start small. Loosen a rule. Watch what happens. Pay attention to patterns and don’t assume all mismatches are fraud. The goal isn’t zero risk, it’s smarter risk.
FAQ: Fraud Filter Mistakes
What is a fraud filter?
A fraud filter is a rule-based system that screens transactions for risk signals like mismatched addresses, high order velocity, or unusual IPs. It helps prevent fraudulent payments from going through.
Can a fraud filter reject a real customer?
Yes. This happens more than most merchants realize. If a customer types in the wrong ZIP code or uses a VPN, the system might treat it as suspicious even if the purchase is legitimate.
What’s a false positive?
A false positive is when a legitimate transaction gets flagged or blocked as fraud. It’s one of the biggest downsides of overly strict fraud settings.
How can I reduce false positives?
Start by reviewing declined transactions weekly. Look at which rules are triggering them. Consider soft declines or manual review instead of outright blocking for minor mismatches.
Should I disable AVS or CVV checks?
You don’t need to disable them, but you should avoid using them as the only reason to block a transaction. A failed AVS or CVV should raise the risk score, not automatically cancel the order.
How often should I review my fraud filter settings?
Every quarter at a minimum. If you’re in a growth phase, launching internationally, or noticing more support complaints, review more often. Filters are not “set and forget.”
Want to Keep the Fraud Filter Without Losing the Sale?
Chargeblast helps merchants clean up bad filter logic before it turns into a refund or a dispute. We break down which transactions are blocked for the wrong reasons and show you where your fraud setup might be too strict or not strict enough. You get clear insights, not canned rules. And fewer false positives means more good customers get through.
