Binoculars.com sees higher sales, reduced fraud from hacker-free label
Focusing on a new way to stay ahead of online fraud, Thralow Inc. reports higher sales conversion rates and less fraudulent use of credit cards after getting Binoculars.com and its other retail web sites certified as hacker-free. "Conversion rates increased 32% for all of our b2c sites, and fraudulent sales decreased as a percentage of total orders from 25% to 4%," says president Jonathan Thralow. "We`re saving at least an estimated $9,000 a year in fraudulent charges."
Thralow says his retail web sites--which also include Telescopes.com, sunglasses shop Peepers.com and pots-and-pans purveyor Pans.com--showed improvements in sales and fraud rates after they began displaying the Hacker Safe certificate from ScanAlert, Napa, CA. Thralow Inc. expects to do $5 million in revenue this year, continuing a pattern of 40% annual increases since 2001. About 80% of sales are through Binoculars.com.
For $149 per month per web server, ScanAlert will test whether a retail web site can withstand attacks from hackers out to steal or disrupt its data, including customers` credit card information. At first, Thralow says, he only wanted to pay for the testing service without displaying the Hacker Safe certificate on his web sites. "We got ScanAlert to make sure our site was hacker-safe, but we didn`t want to give up the real estate on our site to put their certificate on it," he says. The Hacker Safe certificate, which includes the current date and a note that the site is tested daily, is about 1 square inch and can be clicked on to reveal a pop-up window that explains how the site is tested for fraudulent or unauthorized access.
But then Thralow and ScanAlert conducted a two-week test of how web site visitors reacted to the appearance of the Hacker Safe certificate, which was conspicuously placed on the top half of the home page and on the checkout page where customers enter their credit card account information. "The test proved it was worthwhile," Thralow says. "It proved our improved conversion rates and drop in fraudulent use of credit cards."
ScanAlert tests web sites by blasting an average of 1,500 hits at web servers daily to see if there are any holes that allow unauthorized entry. The monthly fee per web server also covers three additional network devices, such as firewalls and database servers. The tests can be conducted within a requested window of time. Thralow Inc. schedules its tests overnight, when web sites are least active.
Although ScanAlert designed its Hacker Safe system to increase conversion rates by making site visitors more comfortable about using their credit cards online, the decrease in fraudulent use of credit cards experienced by Thralow was an unexpected benefit. Ken Leonard, founder and CEO of ScanAlert, says other retailers using the Hacker Safe system have reported only improvements in sales conversion rates.
Nonetheless, Leonard and Thralow say they both figure that would-be users of fraudulent credit cards are scared off by the Hacker Safe certificate as well as its pop-up windows, which note that any fraudulent use of the site will be prosecuted.
Leonard adds that he sees the Hacker Safe system as a tool for sales and marketing as well as security. "The first rule of retailing is understanding the needs of customers," he says, "and one of their needs is protection of their personal information and knowing how a retailer is doing that."
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