Fraud in our current climate is one of the most important topics of the eCommerce Growth Show and the eCommerce industry altogether. The coronavirus pandemic situation has taken everyone aback and one of its consequences is the rising number of fraud activities in eCommerce.

Denise Purtzer has shed some light on this topic and experts around the world really need to hear this session.

There is no time to wait, so let’s begin!

Who is Denise Purtzer?

As VP of Partnerships and Alliances, Denise Purtzer oversees the partner network at ClearSale, a global fraud prevention system. Denise’s 20 years of experience in eCommerce has taken her around the globe, speaking and working in different areas to gain a greater understanding of locales including APAC, EMEA and AMER regions. Working with SMB (Small and Medium businesses) to Enterprise clients, she understands the needs of the specific merchant and their shoppers to help provide the best eCommerce experience possible.

Key takeaways from this episode

The shift in buyer profiles: how does this affect fraud algorithms?

This is an unprecedented time, which means that we have very little historical data to fall back on. Fraud organizations that rely solely on AI or machine learning are finding out the hard way that this kind of crisis can cause serious disruption to the accuracy that they have so long relied on. And merchants are becoming the victims of these algorithms that don’t know how to deal with the current state of things.

Some of the major changes that are causing these issues:

  • Variation in volumes – merchants are seeing spikes of more sales on some items and sales on other goods are taking a sharp dive. These variations affect fraud rates.
  • Changes in buyer profiles – when stay at home orders were basically country-wide, shoppers who have never made a purchase online before flocked to eCommerce. This increase in first-time buyers caused many algorithms to see them as high-risk, as there is no history for these shoppers.
  • Shipping to alternate addresses – many people spent the quarantine in locations other than their known permanent addresses. Some are staying with family or choosing to spend it on vacation homes. New addresses raise red flags for most fraud systems, and without further scrutinization, fraud systems could be rejecting these orders.
  • Recurrency and changes in velocity rules – people are buying goods online at a far more frequent pace than before. Algorithms may be flagging orders with these velocity checks, so it’s important to adjust to the new velocity of buyers and products to ensure these orders are not being declined.

Supporting your eCommerce strategy to grow safely 

Those that had an online presence as only supplemental to their physical store, or those that did not have an online store already, are scrambling. It’s not easy to set up an entire eCommerce presence in such a short amount of time, but getting set up the right way is so important to allow a business to grow at maximum speed.

Some Important notes to consider:

  • Choosing a platform – you may want to consider moving to a new platform provider, one that can scale with you as you are growing.
  • Making sure you are mobile-friendly – mobile orders are starting to become the new norm for online shoppers. Having a mobile-ready online store is vital, but also making sure that you are protected, as mobile orders are at a much higher risk for fraud.
  • Choosing a payment processor – you may already have a processor for your POS, but it’s important to also consider the online side of it – does it make online payments convenient for your shoppers? Do they work with payment alternatives like PayPal, amazon pay, mobile wallets (apple pay, google pay, etc.)
  • Marketing yourself online (social media marketing, etc.) – marketing in the online space is vital to your new eCommerce presence. Test methods and find audiences that will bolster your online sales.
  • Making sure you are protected – your fraud protection needs to be solid. Look into what your platform and your processor offer for fraud protection, then decide what kind of extra fraud protection you need. This is especially important if you have customers across borders, as international fraud protection has a lot of facets and layers to it, so you will need a fraud company that knows how to work in these markets.

How to get your brick & mortar store online during this time

Jewelry stores are a great example of adapting to this “new normal”. The majority of mid-tier independent jewelers in the US were brick & mortar only prior to COVID. When the quarantine hit, many had to close for months. This led stores to rush into onboarding to an eCommerce scenario in order to allow their customers the ability to continue to place orders.

While this sounds great, what many have learned is that jewelry, as a big-ticket item, is at a higher risk for online fraud targeting. Since fraudsters know that many eCommerce stores may be under protected (or worse, unprotected) during this peak online buying time, they are out and looking for targets that get them the most bang for their fraudulent buck. What we’ve had to do is make sure that these jewelers are able to take on this new influx of online orders, but also do so without the extra risk.

These are the times that call for “out of the box” thinking when it comes to making this traditionally physical storefront just as consumer-friendly online. For example, using tools that provide experiences like virtual storefronts or one-on-one consulting give that personalized CX. When it comes to fraud protection for this desirable product, having seasoned analysts review all high-risk transactions gives jewelers the peace of mind that allows them to continue to sell their products without the fear or burden of managing all potential fraud.

“We have two lines of business essentially. We work on the enterprise side and we work with really, really large brands globally. But my heart really is in with the SMB merchants that are getting going whether it’s a quick plug-and-play on a Shopify or BigCommerce platform where they can get started with not a lot of money and really get up and running.”

Next week awaits with our new guest, Jeffrey MacIntyre, founder of Bucket Studio. We will be discussing Progressive Personalization: Getting Strategic with CVO (Customer Value Optimization).

Stay tuned for July 30 at 3 PM UK / 10 AM EDT!