As a startup company with less than 15 employees, Hydrobuilder, an e-Commerce retailer of indoor and outdoor gardening products, must handle the growing pains of dealing with increasing fraud attempts. To streamline the fraud prevention process and minimize overhead, Hydrobuilder onboarded the Kount platform and managed to:
Reduce its chargeback rate from 0.47% to 0.05% (an 89% decrease);
Decrease chargeback dollar amounts by 79%;
Reduce fraud losses by 70%;
Drop its decline rate from 10% to 4.49% (a 55% decrease); and
Reduce the number of manual reviews.
Hydrobuilder often dealt with “friendly fraud” issues prior to the implementation, according to Brittaney Cox, Director of Internal Resources at Hydrobuilder. Consumers would place orders but later on would claim that they hadn’t.
To repel this and other fraud attempts, Hydrobuilder uses Kount’s Order Linking technology to compare data elements in current transactions — such as Device IDs, email addresses, credit card account numbers, etc. — with data elements from past transactions to uncover fraud.
“We had a lot of customers coming in that would commit fraud and then change the information that they were using and commit fraud again,” Cox said in an interview with Retail TouchPoints. “We just had no visibility into catching that. In being able to link orders together through data, we were able to limit those cases where they just kept coming back and hitting us again.”
Limiting Intrusive Questions
Since the retailer only has an online presence, it lacks the face-to-face advantages a physical retailer would have when dealing with customers. This means gaining the shopper’s trust is more difficult, and it’s also more important to establishing longer-term relationships. With order approvals hanging in the balance, Hydrobuilder couldn’t afford to risk alienating customers by asking them for too many details about their purchases.
“It limited our need to call customers and ask them intrusive questions,” Cox said. “Especially in our industry, a lot of people don’t want you to know who they are. This made it easier for us to keep our customer base happy, where we weren’t contacting them all the time to try to get their orders approved. We were able to streamline the process and get the items out faster.”
Cox noted that the nature of payment security today, with customer information becoming more difficult to protect, means that the company must gather the right data points to make intelligent decisions — allowing the good customers to complete their purchases but catching the malicious ones.
“In this day and age, credit cards can easily be compromised, but it’s just a matter of time before they get used,” Cox said. “We now have insight into what has been compromised or what’s been used excessively, and compare data such as IP addresses.”
Automated Reviews Save Company Time
Beyond the insights from Kount, the Hydrobuilder team gained the benefit of time savings. With such a small team, the company could ill afford to spend its time manually reviewing purchases to approve an order. But Kount’s platform is designed to be a hub that integrates platforms such as Whitepages Pro, which enable the company to automate confirmation for billing and shipping addresses.
“We write rules within the program so that we’re not manually reviewing every single transaction,” Cox said. “We’ve been able to implement rules based on patterns that we’ve seen. We’re not declining as many orders. It’s less time and less clicks going through to research all of the information, since it’s all in one spot.”