95% of the orders at Hallmark Business Connections are processed online, CEO Tressa Angell says.
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But, should further review be needed, such as when the shipping address is not on file with the bank, the e-retailer conducts a manual review. While e-retailers avail themselves of automated processes that block the bulk of theft attempts, manual review remains important for those iffy sales that could be valid, but need a quick investigation. Automated measures include address verification services from payment processors and velocity checks that measure the number of recently attempted purchases from a particular web address.
The cell phone shift
At BirthdayDirect.com, Elam attempts to make the manual review process as quick and automated as possible. He built the company's manual review program so employees could click a button and check the distance between the shipping and billing addresses via a link to Google Maps. BirthdayDirect.com employees quickly can determine if the shipping and billing addresses are in the same metropolitan area. If so, that makes it more likely the retailer will approve the transaction, he says.
Another button, when clicked, automatically populates the customer's phone in a reverse address search to check if the supplied address matches that of the phone number. While acknowledging this step does not work with cell phone numbers, it is another tool, and an easy one to check, Elam says. Unlike directory assistance for landlines, no such service exists for cell phone numbers.
Overall, about 75% to 80% of BirthdayDirect.com's customers use a cell phone as their primary contact number, and 65% have only a cell phone number to provide, Elam says. The next most-provided number is their work phone number, as either a primary or alternate, he adds.
Ideally, there is no need to contact the customer to verify the transaction, Elam says. He views contacting the customer as a last resort. "When she submits an order the next thing she should get is an order confirmation e-mail," he says. "I don't want to give her a reason to back out of the transaction."
E-retailers are sensitive about the prospect of invalidating legitimate sales, Fergerson says. "The manual review queues are getting bigger," she says, basing this on anecdotal information from e-retailer sources. As an e-retailer, Fergerson says she would increase her budget for manual reviews time or be prepared to take more fraud losses.
"You never want to spend more preventing the fraud than the actual fraud losses total," she says. When the cost to prevent fraud is more than the fraud itself, legitimate sales are often being rejected, she says.
That helps explain why Elam at BirthdayDirect.com is so focused on the manual review process. Families and friends always have birthdays to share, and party supplies to buy. "I don't want anything to tarnish the BirthdayDirect.com name," he says.