April 7, 2011, 12:16 PM

Bodybuilding.com pushes down its chargeback rate

The retailer of nutritional supplements reports an 85% reduction in chargebacks.

Paul Demery

Managing Editor, B2B E-commerce

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Launched in 1999, Bodybuilding.com operated for years with what it says was an extremely low chargeback rate. But within a decade, along with its growth in site visits and sales, its chargeback rate started to surge.

“Over the course of a year, our chargebacks started rocketing, doubling month over month,” says Ryan Vestal, corporate controller. “By December 2009, our chargebacks were 1% of sales.”

Adds Troy St. Pierre, vice president of global business development and customer service: “As our company grew, people started to hear about us more, and with more attention we had more activity from fraud.”

Bodybuilding.com, a unit of Liberty Media Corp., No. 11 in the Internet Retailer Top 500 Guide, realized that the extra attention and higher chargeback rate would require more sophisticated fraud prevention technology to replace its home-grown system. The internally built system could not keep up with the volume of orders and automatically provide a risk score each transaction, the retailer says.

Last year it deployed Kount Complete, a fraud prevention technology platform from Kount Inc.

With a several fraud prevention tools including device fingerprinting and risk-scoring tools, the Kount Complete platform has enabled Bodybuilding.com to process high volumes of transactions while, at the same time, more accurately identifying which orders should be accepted, blocked or temporarily held for manual review.

The new system, which is hosted by Kount in a software-as-a-service environment, has resulted in an 85% drop in the retailer’s chargeback rate, to 0.15% from 1%, St. Pierre says.

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