With massive data breaches being announced seemingly every week, the threat of online fraud looms larger than ever for e-commerce merchants.
But while the bad guys are upping their game with a new trove of stolen identities, the good guys aren’t standing pat. Leading e-commerce platform Magento, for instance, recently announced that Signifyd’s machine-learning fraud protection is now natively embedded in the Magento platform, meaning that cutting-edge fraud protectionis little more than a click away.
“With Signifyd, our merchants will enter a new era of payment security where every order is protected against fraud and chargebacks,” Andy Barker, Magento’s senior director of strategy and growth, global payments, said when Signifyd’s solution was embedded in the platform.
The combination of Magento and Signifyd creates a powerful force in e-commerce and provides an answer for online retailers who have been plagued by ever-more sophisticated fraudsters. For its part, Magento brings an open and agile platform on which merchants can build elegant sites that work across channels and devices.
The Magento platform acknowledges the rising demands of digital consumers by accommodating the fluid shopping styles that are a part of everyday life. Merchants on Magento deploy multi-device strategies with order management systems that allow ship from store, ship to store or click and collect.
And while Magento focuses on attracting the kind of buyers that merchants want, Signifyd’s Guaranteed Fraud Protection handles the kind of malicious buyers that every merchant wants to avoid — fraudsters.
Of course, the fraud protection challenge is about a lot more than simply thwarting fraudsters. The true cost of fraud includes the revenue lost from orders that are not shipped for fear of fraud — even when those orders were placed by legitimate customers. Not only does the merchant lose that sale, there is a good chance they lose that customer, too.
“I can’t really think of a much worse customer experience than getting the buyer all the way to check out and then you don’t let them complete the purchase,” says Lee Hadsock, Signifyd’s head of partner development.
The industry refers to such withheld orders as “false declines.” Hadsock says “insult rate” is a better way to think about the portion of orders never shipped, because of the frustration that withholding orders causes customers.
The initial cost of declining legitimate orders last year alone was $8.6 billion, Business Insider says. And that’s before you add in the financial hit of losing a customer for life. Nearly a third of legitimate customers stop patronizing a merchant who turns down their credit card, MasterCard reported.
Signifyd tackles the insult rate by relying on data from transactions on the sites of its more than 5,000 customers, supplemented by data from world-leading third-party providers — all of which allows Signifyd to instantaneously conduct fraud review and automate a merchant’s fulfillment for faster delivery.
“Our merchants are focused on remaining competitive with global marketplaces like Amazon,” Magneto’s Barker said. “With Signifyd they can ship products faster and deliver a better customer experience.”
With Magento powering the front end and Signifyd protecting merchants on the back end, online sellers can focus on the things that inspired them to launch their businesses — selling products and serving customers.
Alligator Performance, a Magento user that sells high-performance auto parts, was struggling with fraud and false declines before deploying Signifyd.
After turning to Signifyd, the Washington-state-based merchant increased its accepted orders by 20 percent. Those were orders, Alligator Performance General Manager Jason Kuenkler says, “that we would not have had before because we would have been watching closer and we wouldn’t have accepted those orders without the level of detail that Signifyd is supplying.”
While turning to machine learning and Guaranteed Fraud Protection is the most comprehensive way to avoid false declines, there are extra steps merchants can take on their own to ease the problem. Three key best practices:
Take the extra step: The billing address doesn’t match the delivery address? Sure, it’s a red flag, but look to outside data to determine whether there is a connection between the two addresses. Home and office? Relatives? Consider factors such as the age of the email account, the buyer’s account history. Explore social media and real estate and property databases.
Trust your gut: Based on all the history and data available, are you able to craft a narrative that explains an unusual set of circumstances that had come together in one particular order? If the story is sound and logical, you’re probably looking at a good order.
Get some help with e-commerce fraud: Your company’s mission isn’t fraud prevention. Why not turn to someone whose mission it is? Signifyd has seen many more online consumers than any single merchant — both fraudulent and legitimate. In fact, when a customer arrives at your site, there is generally a three-in-five chance that Signifyd has already seen that customer elsewhere in its network.
And most of all, when it comes to fraud and approving orders, don’t let the bad guys win.