Primary.com, which launched today, is working directly with manufacturers in an attempt to sell products at lower prices than traditional retail brands.
Accertify’s service helped the airline avoid $490,000 in potential chargebacks in two months.
Southwest Airlines Co. began selling gift cards online in 2006. The cards quickly became successful, says Brandon Adams, the airline’s ticketing operations manager.
The downside of the cards’ success, he says, is that they started to attract criminals who used stolen credit cards to buy gift cards online. By 2012, 90% of the airline’s gift cards were bought online and Southwest faced the prospect of losing millions of dollars in chargebacks. Fraud triggers chargebacks when the legitimate consumer whose credit card number has been used to make the purchase complains to his card-issuing bank, which then retrieves the money from the merchant via a chargeback.
Southwest had been manually reviewing gift card purchases. That approach “limited us to a static report of fraud attempts during the prior 24 hours—there was no real-time manipulation,” says Adams. In other words, criminals had roughly 24 hours to book and fly with a gift card that was purchased with a stolen credit card.
To fight the problem, the airline turned to risk-management technology and services company Accertify Inc., which it had been using since 2008 to monitor card-not-present ticket sales on Southwest.com. Card-not-present transactions are riskier than store-based transactions, where a consumer has her card in hand.
Since it began using Accertify’s Interceptas Data Management Platform to monitor online gift card transactions earlier this year, the airline has been able to reduce the number of specialists required to review gift card purchases from 10 to two. And in January and February of this year, those two specialists, working with the Accertify system, helped save the airline more than $450,000 in potential chargebacks, Southwest says. For the sake of comparison, the 10 specialists during the same period a year earlier saved the airline about $190,000, the airline says.
Accertify, Adams says, has saved Southwest a lot of money and staff time. Since it began using the service in the third quarter of 2008, the airline has reduced its manual review rate 44% and cut labor costs 59%.