The Blind Side of Customer Experience

1riskifiedFashion retailers expend significant resources and energy building and positioning their brands, so they naturally want to provide consistent brand experience both in-store and online — from curating the right product offering and designing beautiful physical and digital stores, to generating customized experiences for consumers.

Unfortunately, the majority of retailers have a blind spot when it comes to their online brand experience, overlooking a crucial component of the online purchasing process — the fraud review stage. Fraud review comes at a sensitive time within the order flow, post-checkout but pre-fulfillment and shipping.

After spending considerable funds and effort converting visitors into shoppers, many fashion retailers inadvertently add friction to the shopping experience by implementing authentication services and validation practices that require consumers to provide additional data before the purchase is confirmed. This results in an absurd situation where global luxury brands utilize the same fraud prevention measures and processes as low-cost travel websites.


Even with these friction-filled practices in place, the average fashion retailer still declines 5% of all online orders due to suspected fraud. The vast majority of purchases rejected by retailers’ fraud management systems, however, are incorrectly identified as fraud and are actually placed by good customers.

Just imagine what this would look like in a physical store — one of every 20 shoppers leaving the store would be kindly requested by the doorman to step aside and return their shopping bag because they seem suspicious. None of these consumers would return to your store to make a purchase again and they would be sure to tell their friends and family about the humiliating experience.

International Orders

Cross-border shoppers are especially likely to experience friction and often even false declines.

For example, many Chinese nationals live and work abroad, and so it is very common to see fashion items purchased online with Chinese cards but shipping to U.S. and European locations rather than to China. For common fraud management systems, this mismatch between the credit card country and the shipping country raises a red flag. The order may be routed to manual review or rejected outright.  

With data showing that over 98% of cross-border luxury fashion purchases made with Chinese credit cards are legitimate, fashion retailers — and especially luxury brands — should be opening their virtual doors to Chinese online shoppers.

Consider the 675 million international tourists who arrive in Europe and the U.S. every year. Many of them are on business trips or quick weekend getaways. To save time, affluent fashion-savvy tourists may place an online order and have the package shipped to their hotel. But a high value order placed with a foreign credit card and shipping to a domestic address that has no apparent link to the buyer will likely be declined by common fraud prevention tools.

Holiday Sales

The unpleasant experience of having a purchase declined is not limited to international shoppers. Especially during sales, when there is a significant spike in purchases and an opportunity to generate considerable revenue, fashion retailers turn away more legitimate shoppers than usual. Even if transactions are ultimately approved, it usually happens after a long and unacceptable processing wait time of several days.

As the holidays approach, we are bombarded with media reports and projections about an expected increase in fraud during the sales season. In fact, the number of people perpetrating fraud does not suddenly increase come November, while there is a surge in the number of regular shoppers looking to enjoy the sales. As a percentage, fraud attempts account for only 0.6% of all online fashion and apparel purchases on Black Friday and Cyber Monday. Yet during the holiday sales, leading global luxury fashion retailers have a false decline rate of 75% — meaning 3 of every 4 purchases they decline could and should be safely approved.

Fighting Fraud In Fashion

Fashion retailers must understand that for consumers, the fraud review process is inseparable from the overall digital shopping experience.  In the same way retailers do everything in their power to create a positive experience for consumers at their physical locations — from the music playing softly in the background, through the flattering angle of the dressing room mirrors, to the friendly sales clerk and polite doorman — so too they must ensure a superior brand experience online.

It is important to realize that while it takes places in the backend rather than on your e-Commerce site, fraud management often does (but never should) impact shoppers’ experience and perception of your brand. Fraud prevention systems often perform poorly when handling purchases from new markets and channels, essentially holding fashion retailers back from growing their revenue and expanding their international customer base. Awareness of these dangers is the key to fixing the fashion system and to providing an optimal experience to consumers both online and in-store.

Andy Freedman is the CMO at Riskified, driving global market and demand strategy and strategic partnerships. He brings over a decade of branding, marketing and strategy expertise in building Riskified’s brand and marketing department. Prior to joining Riskified in 2014, Freedman served as the Vice President of Strategy and Revenue at LevelUp, leading strategic ventures and partnerships. He previously held multiple leadership roles at Fortune 500 companies, including Visa and General Mills.

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