Online retailers, including financial institutions, routinely find that 50% to 90% of shopping carts or in the case of banks, product signup forms, are abandoned.
Many of the reasons are out of your control: the customer changed their mind, didn't like the price/terms, or the boss just walked in.
One important variable you do control is the feedback provided when the user makes an input mistake. The best practice is to show errors in red along with detailed instructions on how to fix each missing or incorrect field.
But sometimes, with small fonts and multiple error messages, even these messages get lost, forcing the customer to abandon the application out of frustration.
Contrast that to Dell's approach. If you type the wrong password, a large red warning sign is returned right in the password-input screen (see inset). This is one error message you absolutely cannot miss.
--JB