The holiday season means big bucks for eCommerce retailers and the fraudsters that follow money. According to the National Retail Federation, sales in November and December can comprise up to 30% of a retailer’s annual business. Unfortunately, with this increase in volume comes a spike in fraud. This season, try the Jack White Fraud Review System:
During a 2010 interview, the now 8-time Grammy award winner Jack White explained the key underlying philosophy to his approach in anything he does; the importance of the number three. Before he was a famous musician, he worked as an upholsterer. While on the job one day, he had the epiphany that it takes exactly three staples to hold a piece of fabric in place. Two staples were not enough. A fourth staple was un-necessary. Three was the right number. He transferred this philosophy of “just enough, but no more” to his his artistic endeavors with remarkable results. While my career in risk management and fraud control at GameStop isn’t nearly as interesting as Mr. White’s, I do see that we share some similar philosophies when it comes to how we approach our jobs.
1. Keep Things Simple
I believe it’s important to focus on high impact data points that play a large role in having great results. Trying to analyze hundreds of low impact pieces of information can distract you from the big picture. Complex nested rules and machine learning have a place in fraud strategies but need to fit well into your overall business strategy to be effective. A collection of easy to understand and weighted rule sets with a manageable but powerful set of input signals from high quality data providers, like Whitepages Pro, lets us quickly and confidently modify our strategy for a blockbuster game launch at 12 am and for peak sales periods throughout the year.
2. Focus on What Counts
Along these same lines, we’ve found it’s tempting to only focus on fraud prevention. However, it’s just as important to be engaged with multichannel teams and develop a fraud strategy that enhances the customer’s experience while controlling risk. My team’s primary goal is for our customers to have a great online ordering experience from start to finish. Minimizing friction for customers and reducing cancelled orders will outweigh the occasional chargeback. By streamlining my fraud strategy I can better serve the customers shopping on our website. We can’t let the frayed end of one guitar string ruin our encore performance.
3. Challenge the Norm
Jack is always challenging himself to be uncomfortable, to break from routine. He says this gives him the creative edge he needs to stay fresh and relevant. While I may not take this to the extreme Jack does, I completely buy into the fact that our fraud strategy has to continuously evolve with emerging trends. As the sources of fraud shift and change, the data points that effectively capture them will as well. The data we analyze has to stay relevant for us to be successful. This may not win us any Grammys here at GameStop, but I know the great experience we provide will continue to win over our customers.
Get more details on my approach through the webinar I hosted with Tom Donlea of Whitepages Pro as we discussed tactical ways to fight fraud and clear good orders faster.