There is no question that online shopping is growing at a rapid pace. Last year, U.S. online retail had the highest year over year growth rate since 2011. Consumers spent $453 billion online, equating to a 16% increase year over year.
Unfortunately, as ecommerce sales continue to grow, so does fraud. Just as online shopping has evolved, the tactics of fraudsters looking to take advantage of personal information become more and more sophisticated making it harder for merchants to prevent. In fact, ecommerce fraud rose nearly twice as fast as ecommerce sales in 2017. It is no coincidence that last year was also a monumental year for data breaches, where 2.6 billion data records were compromised, an 89% increase from the year prior. This statistical trend suggests that companies of all sizes will continue to struggle with data breaches and increased fraud throughout 2018 and beyond.
Online fraud is an ongoing concern, and one that all ecommerce enabled retailers, and big-ticket retailers in particular, should be made aware of. Fraud rings are incredibly sophisticated and continuously evolve as merchants and banks make steps to become more secure. As targets, merchants must constantly evolve their fraud management workflows, tools, and teams. With the right precautions in place, a business can stay ahead of fraud, protecting their customers and reducing chargeback costs.
But keeping up with the latest techniques is a challenge, especially in a space like fraud prevention that changes so rapidly. The CNP (Card Not Present) Expo is an annual event for fraud professionals to learn and network with one another, with a major focus on merchant connections and support. The emphasis and value of learning from industry experts and creating connections with peers is unparalleled.
This year was Blueport Commerce’s fifth time attending the CNP Expo. The caliber of attendees was highly impressive and the agenda curated a week chock full of valuable insights and engagement, covering topics like global payments and strategy, advanced chargeback management, emerging fraud trends, and more.
Blueport Commerce leveraged the CNP Expo as an opportunity to expand on how we think about fraud, validate our current processes and tools, and learn how to continue to elevate our fraud prevention performance inside and outside our organization.
Here are some key takeaways we found valuable:
- Measure your Success: Provide data to drive better outcomes by creating department and individual KPIs, which are contingent upon one another and fluid. Multiple touch points with your team should be a habit, as you make accountability and context core parts of your culture.
- Chargeback Strategies: Study your chargeback data to become knowledgeable about their origin. There are opportunities to update descriptor messaging to prevent them from being filed in the first place and there is value in differentiating between fraud and service reason codes.
- Operational Best Practices: Connecting with professionals in other verticals will shed light on common fraud trends and creative, yet practical, strategies to minimize fraud. Although your fraud prevention methods will vary depending on your business model, sharing knowledge is invaluable and will get you thinking outside of the box.
- Fraud Identity: Just because fraud deals with money flowing in and out of your business, does not necessarily mean the fraud department is locked into reporting to the Finance department. Consider creating a task force consisting of key decision makers from Finance, Loss Prevention, Customer Service, Ecommerce Operations, and Marketing. Fraud requires a special niche group and is ultimately an operational strategy with a financial implication.
- Digital Crime Scene: Leverage all data points and available information to build a physical case that tells a digital story. By organizing the fraudulent activity and linking virtual evidence, you will position yourself favorably with law enforcement if you choose to prosecute fraudsters.
We are proud of our proven model that balances machine learning with human intelligence for a holistic strategy. Our layered approach and robust reporting, in combination with our evolving processes and innovative workflows earned us the inaugural CNP award for Merchant of the Year! Our exceptional fraud team and dedication to learning and growing in this space is truly making an impact on the omnichannel furniture industry. It’s a privilege to be part of an innovative team that challenges each other and strives to be better than yesterday. We hope to see you next year in San Francisco at CNP Expo 2019!