Canadian outdoor outfitter and military surplus store Hero Outdoors was doing business in a challenging environment—worldwide ecommerce featuring many high ticket-value products as well as resale items and collectibles. Unfortunately, their previous fraud-prevention partner wasn’t an ideal sidekick.
“Fraudsters are creative,” said Hero Outdoors owner Jeff Schwartz. “For example, if a person ordered a pair of boots and sent back the empty box, that’s return fraud. But our old fraud provider would hear nothing of it.”
92.4%
An average of 92.4% of orders approved each month
0.24%
A monthly average chargeback rate of 0.24%, with costs covered by ClearSale
Responsive
Responsive, personalized fraud prevention and customer support
The Challenge: Responsive, Personalized Fraud Prevention & Customer Support
Hero Outdoors had two issues with their previous fraud protection provider. One was the high rate of false declines. An analysis found that 90% of those declines were good orders rejected in error.
Rejecting good orders causes more losses than the value of the denied orders. Often, those customers won’t come back, and they may also discourage other shoppers from ever visiting.
- 36% of Canadian online shoppers say they won’t order again from a merchant who rejects their order
- 32% say they’ll make a negative comment about the merchant on social media after a decline.
Hero Outdoors also struggled with its fraud prevention provider’s response times. Waiting for an email response when they had orders pending approval was frustrating, and Schwartz said that when fraudulent transactions didn’t fit the provider’s rigid criteria, there was no way to appeal.
What Hero Outdoors needed was a fraud solution that could approve more good orders while keeping chargebacks to a minimum, partner with the store on solving its particular fraud challenges, and respond quickly when Hero Outdoors needed help.
The Solution: ClearSale Total Guaranteed Protection
ClearSale’s Total Guaranteed Protection service includes 100% guaranteed coverage for clients’ fraud-related chargebacks. That means that if ClearSale approves an order, but it turns out to be fraud, the merchant pays nothing for that chargeback.
How does this work? ClearSale reviews every card-not-present order that comes in—whether it’s card numbers keyed into the store’s online checkout system, the order is done via phone or mail-in, email orders, or digital wallet payments online.
- The first review step uses unique AI technology to analyze each order using the customer’s behavioral data, purchase history, device information, order contents and more. If the AI flags the order as risky, it’s not simply rejected.
- A fraud analyst reviews the risky order, drawing on expertise in the merchant’s industry, language, risk profile and experience with similar orders. If the analyst OKs the order, it’s approved, which protects the customer-merchant relationship.
- If the analyst suspects fraud, a second analyst takes up the case. The fresh analyst digs for details that could validate the order, up to and including reaching out to the customer. If the second analyst approves the order, that’s another customer experience and revenue win for the merchant. If the order is rejected, the merchant can be confident that it was fraud.
The fraud-detection system also gets smarter and more efficient all the time, as analysts feed their findings into the AI algorithm so it can learn the nuances of the merchants’ particular customer behavior.
The Results: More Approvals, Fewer Chargebacks
Hero Outdoors switched to ClearSale in 2018 and has kept them ever since, in line with ClearSale’s global 99% customer retention rate.
Hero Outdoors’ monthly approval rate for January-July 2021 averaged 92.4%, despite a relatively high rate of order cancellations by customers and widely varying fraud attempt rates.
Chargeback rates trended down during the same period, with a monthly average of 0.24%.
Hero Outdoors is responsible for none of those chargeback costs because of ClearSale’s Total Guaranteed Protection.
An Effective Fraud-Fighting Partnership
With ClearSale as their fraud prevention partner, Hero Outdoors holds on to more revenue and more customers. The executive team also spends less time worrying about fraud and more time processing orders for its customers across Canada and around the world.
“ClearSale allows us to move more freely and allows the flow of orders to move along without holdups and hiccups.”
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