From box office managers to tech suppliers, ticketing experts have spent years lowering barriers to entry with better technology, better online experiences, and smoother purchase pathways. But with payment fraud creating a growing headache for the sector, the measures you put in place to block bad actors also risk increasing friction for genuine ticket buyers — adding a new tension to your carefully calibrated patron experience.

For many box office managers, the instinctive reaction to fraud is to tighten every security measure. But a zero-fraud goal is rarely realistic, or even desirable. If your settings are too aggressive, you’re not just blocking a transaction — you’re risking the long-term relationship with a loyal patron who just wants to support your work.

Follow our simple guide to audit your fraud status and find a balance that protects your revenue, without damaging your conversion rates.

• Understand what ticketing payment fraud looks like
• Detect ticketing fraud concerns through regular monitoring
• Implement the right mix of measures to limit fraud without blocking genuine sales

Understanding Payment Fraud

Most payment providers let you choose from a range of interventions to prevent fraud. Unfortunately, many of the same tools will also create some friction in your transaction process.

Payment Fraud Mitigation Options Include:

• Requiring buyers to input the CV2 code (the 3-4 digit security number on the card)
• Using an address verification system to check if the billing address matches what’s on file at the cardholder’s bank
• Blocking cards issued in a certain country
• Offering Apple Pay with fingerprint or face ID to shift the liability away from your organization
• Implementing 3D Secure, which provides an extra layer of verification to the transaction

Yet Most of Those Come With a Trade-Off:

• The effort it takes to find the CV2 code might delay or deter a customer from completing their purchase
• An address verification system might inadvertently block a customer from making a legitimate purchase if their address doesn’t match perfectly, perhaps because of a recent move or variation in spelling
• The assumption that payments coming from a certain country are fraudulent could block someone who’s traveling to your city to see a show
• 3DSecure, while mandated in the EU and UK for all but very low-value transactions, is less common in the US and Canada, making it possible that customers will be confused or anxious about the extra step.

The exception to this rule is Apple Pay, which reduces both fraud risk and friction for patrons who choose to use it. If you have the ability to offer Apple Pay, turn it on today! It’s unlikely that every patron will choose that payment method, but you may be surprised by how many do so.

But how do you decide whether you should, or should not, implement the other solutions?

That’s less clear-cut. The decision starts with understanding whether you have a payment fraud problem today — and then finding the right balance between risk and friction for your organization and audience.

Do You Have a Payment Fraud Problem?

You don't need to be a technical expert to understand your current risk profile. By measuring and tracking two key metrics, you can quickly understand whether you have a fraud problem today — and spot any emerging problems early, to avoid cost and effort tomorrow. We recommend glancing at your metrics weekly and monitoring more closely if you do spot any fluctuation.

Chargeback Rate

Chargeback rate is the percentage of total transactions resulting in a dispute.

Stay below 0.5%, which is the industry benchmark for card networks like Visa. Higher rates may incur fines from your acquiring bank.

• If your chargeback rate is above 0.5%, contact your payment provider for advice.
• If your chargeback rate is increasing, consider implementing additional payment fraud mitigation options, or contact your payment provider for advice.
• Look for unusual purchase patterns over recent months, which might explain the change — for example,  high-value purchases made by new international customers — as these can help you identify the most relevant mitigation steps.
• If your chargeback rate is below 0.5% and stable or decreasing, you may well have the right balance between risk and friction. If you’re still concerned, try implementing some low-friction mitigation options like introducing Apple Pay — but be careful to set realistic expectations for your stakeholders.

Authorization Rate

Authorization rate is the percentage of attempted transactions that are successfully approved. For arts organizations, this should ideally be 95% or higher.

• If your authorization rate suddenly reduces, contact your payment provider for advice. Look for additional measures to explain and help address the change, like multiple failed transactions using different card numbers, but the same billing address. These should appear in your metrics immediately.
• If your authorization rate is below 90%, we recommend easing some of your fraud mitigation steps — especially if authorization rates are stable, and chargebacks remain low.
• If your authorization rate is below 95%, you may consider easing some of your fraud protections — but there’s no urgency to do so, if you’re not hearing customer complaints.
• If your authorization rate is at or above 95%, it’s likely you’ve got things right. That last 5% is likely to represent a mixture of:
  • Human error, as people mistype their card or address details.
  • Transactions blocked by patrons’ own banks, either because of insufficient funds or security concerns on their part.
  • Your mitigation measures are doing what they should, by blocking a small number of fake transactions.

A Shared Quest for Balance

Managing these settings manually is a constant balancing act that requires regular monitoring and an understanding of changing regulations, such as the new Visa VAMP standards.

This is where your choice of technology partner becomes critical. Many payment providers leave you to monitor your own security measures, and dial security measures up or down entirely on your own.

Spektrix takes a collaborative approach. Through Spektrix Payments Fraud Protection, powered by Adyen, we monitor authorization and chargeback rates across our entire network. If we see any concerning change in your chargeback or authorization rates, we’ll reach out proactively and work with you to optimize security settings. That frees you up to focus on your audience, while we stay alert for signs of fraud and help you find the right balance for your needs.

With Spektrix Payments Fraud Protection, average chargebacks in the US and Canada are just 0.07%, while authorization rates sit at 95%+. Watch back our webinar to learn how it’s changed the game for organizations like Fox Tucson Theatre and Magic Mike Live.

Fraud is a reality of digital commerce, but it shouldn't be a source of anxiety. By monitoring your authorization and chargeback rates, you can find the right balance of payment fraud security measures to protect revenue growth —not prevent it.

This article was sponsored by Spektrix.