Every business needs to find its own balance between fraud prevention and capturing more sales at peak holiday season.
You’re preparing for peak holiday season. So are the fraudsters. What should you do? As you seek your sweet spot, here are seven key areas to consider.
1. Have a robust plan for manual reviews
Handling manual reviews effectively is a perennial challenge of peak season. But it’s essential to delivering a good customer experience. So get prepared by considering likely scenarios and developing a plan for how you’ll handle them.
For example, what will your strategy be if your manual review team is depleted as a result of COVID-19 sickness? What contingencies will need to be in place so the experience of your customers isn’t damaged?
Could you adjust your rules so fewer orders go to manual review?
Could you use an external manual review team?
If you do find you need help, our Managed Risk Services team is always available to help relieve the pressure.
2. Keep things smooth for valued customers
How can you ensure your highest-value customers experience the least friction?
One effective option is to put them on a safelist so their orders won’t get caught in reviews. They can then place and receive orders without hassle.
For other good customers, you might consider building in more flexibility to your rules to reflect the reality of peak season. For example, if your customers are likely to be visiting relatives, their shipping and IP addresses might well look different to normal. For less friction, adjust your rules accordingly.
3. Protect against card testing
Card testing, low-dollar purchases made on stolen cards to test if the card has been cancelled, creates unwanted costs: authorization fees, chargeback costs, even potential brand damage.
The solution? Adjust your rules.
For example, set minimum payment amounts that are as high as practical for your organization. With that simple step, you prevent fraudsters from testing cards with amounts that lie below that minimum.
If you’re using Decision Manager, it’ll automatically detect anomalies that suggest card testing, making it even easier to detect and deter card testing fraud.
4. Protect against account origination fraud
As people have turned to online shopping during the pandemic, there’s been a rapid growth in the creation of online accounts, or account origination fraud. Unsurprisingly, we’ve also seen growth in fraudsters opening online accounts using stolen or fake identities. Their plan is to place fraudulent orders using stolen cards during peak season when they think they’re less likely to be spotted.
Account origination fraud can lead to chargeback costs and increase the risk of changes to your standing with financial institutions. But you can fight it with the help of identity validation providers such as Emailage and Ekata that help you decide whether or not a new account might be fraudulent.
Both of their tools are integrated into Decision Manager.
5. Protect against account takeover fraud
Fraudsters continue their attempts to take over existing accounts by guessing passwords and using details stolen through phishing attacks. And when there’s a card on file, such account takeover fraud can be especially damaging.
The key is to have a tool in place, such as Account Takeover Protection, that lets you set rules to identify suspicious activity and so help prevent fraud.
6. Test your changes in advance of peak season
In advance of peak holiday season, it’s always good practice to use a fraud management tool such as Decision Manager Replay to test changes to your fraud management strategy against your historical data.
Running such what-if testing of proposed changes is a powerful way to inform your decisions.
If you need additional expert advice, Cybersource Managed Risk Analysts are always available to advise on how fraud trends are changing during the pandemic, through peak season and for your industry.
7. Watch out for an increase in friendly fraud
Friendly fraud, when individuals claim not to have received goods and instead file chargebacks to avoid paying for them, often increases in volume when people are struggling financially—as many are as a result of COVID-19.
Some friendly fraud is unavoidable, but you can at least minimize its impact on your chargeback rate. The trick is to train your customer service teams to be proactive at offering refunds or alternative resolutions. Then, if your customers feel it’s easy to get a resolution, they’ll be less likely to file a chargeback, or a return of funds to their account. You can then reduce the number of chargebacks you incur.
Lay the foundation for a successful peak season
Peak season this year will present challenges.
But with the right preparation and with the right systems and processes in place you can still deliver a strong buying experience while effectively managing fraud. You can lay a solid foundation for making the most out of this year’s peak season.
For more in-depth information on preparing for the 2020 peak season, download our white paper Peak Season 2020.