News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Wishing You a Merry Christmas in July

Wishing You a Merry Christmas in July

Year-round milestones from a top online retailer to prepare for a successful holiday season

Compiled by CardNotPresent.com staff

For the fraud prevention teams of most online retailers, the months surrounding the holidays mean long hours, a flurry of orders and pure madness. Instead of sugar plums dancing in their heads, the little sleep they DO get often is marred by fraud review screens in their nightmares—all to ensure that the good orders are shipped quickly while the fraudulent orders are canceled prior to shipment of goods. But, once January rolls around, many breathe a sigh of relief and try to forget about the two months of life that passed in a blur until the following October rolls around. For at least one major online retailer, however, preparation for the holiday season begins in January.

Blaise Peters, senior manager of fraud prevention at NewEgg has more than a decade of fraud prevention experience and has learned a few things when it comes to surviving the holidays. While most people are thinking of vacations at the beach and family barbecues, Peters still has part of his mind on the long and stressful holiday season not far in the future. Even though the weather is still hot, winter is coming, so he was kind enough to share some of his off-season process with the readers of CardNotPresent.com.

Why is it important to plan for the holiday season year round?

The most important reason I believe in keeping a year-round checklist for holiday preparation is to make sure you’re getting resources locked in before they become unavailable. It’s important to use the previous year’s volume and metrics to create projections for the following year (starting in May) to ensure HR knows how many seasonal fraud analysts to hire and that it has the budget to train them properly. Those are the kinds of things that need to be scheduled in advance. Projections, even if they’re a little off, will provide a starting point to discuss budgets with executives and gain approval before holiday budgets are spent by other teams.

What do you think are the two most important items on your preparation list?

Making projections and creating milestones throughout the year so you don’t miss dates and lose out on resources is critical. It’s the foundation of all the other steps. Second, remember to have fun. The items and strategies I include to help my team de-stress are so important.

How does “have fun” fit alongside budgets and studying analytics?

It’s really a human resources perspective. You can’t just look at data and tools. You have to look at the holidays from a personnel perspective. You have to combat the burnout. People can be drained after Thanksgiving and you need those people through Christmas. Morale through the holidays can be self-perpetuating. If analysts are overworked, tired or missing out on family functions, they may start snapping at work, impacting the team morale and ultimately the work product suffers. I’ve observed a huge payback in people when they feel appreciated. It’s important to make the environment fun and not stressful, and to deposit into their emotional bank in addition to providing a paycheck.

Do the team incentives and parties come out of a separate budget or do you provide these for the team yourself?

I budget for them just like I budget for continuing education and fraud tools. And because it’s at the end of the year, I set funds aside all year to ensure I don’t spend these designated funds the rest of the year. This is not an area I cut from the budget.

Do you have any advice for retail fraud managers that may not have a year-round holiday strategy yet or if this is their first holiday season?

If it’s my first holiday with a new company or if we’re launching a new popular product or business model, I go conservative on how much I think we can accomplish when doing the annual projections. I try to underpromise and overdeliver on all of my projections and over-ask for resources by 10 to 20 percent. I always try to set myself and my team up for success with what I’m requesting in the budget, because I’ve learned that something always comes up—a last minute marketing launch, new fraud attacks, system hiccups under the strain of increased traffic, losing a team member due to attrition, etc. If I don’t spend the extra budgeted funds, then I return it to the company, which executives always appreciate and notice. It’s also much easier than asking for additional budget dollars late in Q4.

A Retail Fraud Manager’s Holiday Preparation Check List: 

January:

  • Review your holiday performance with your leadership team or informal leaders (process, personnel, hours, communication, cross-department cooperation, rules, training, preparation level)the best time to evaluate how things went and suggest changes is when your memory is fresh
  • Create a Holiday Planning Checklist for the next holiday season
  • Set up tasks with notes explaining them
  • Create due dates for your tasks and sort the list by date
  • Include a column for tracking completion
  • Set vacation blackout dates for November and December

May:

Start locking down resources:

  • Start projecting volumes and review the resources necessary to handle the projection (this may impact your head count, training room size, number of classes, etc.)
  • Schedule out the dates of your training class (or classes, if you need more than one)
  • Reserve a training room, desks, phones and computers
  • Identify your trainer from your year-round fraud analyst team

July:

  • Meet with your recruiter. Whether you are hiring your seasonal help directly or going through a temp agency start talking about skills needed and numbers early (Observation: It gets harder every year to find people good people willing to work for just 8 to 10 weeks).

August:

  • Start updating or creating training documents. This process always takes longer than you think usually including multiple revisions
  • Set up your holiday hours and schedules 
    • Don’t forget shipping cut-off dates like last day for ground shipping (These can be high volume depending on your business)
    • Don’t forget Christmas Eve and Christmas Day for digital products and gift cards
    • Include other important dates for your customers/business
  • Remind your marketing team you want a list of promotions and promotional SKUs in early November

September/October:

  • Start the interview process in September or October depending on how long you want your seasonal staff to practice
  • Train your seasonal staff
  • Set up your holiday rules for your fraud rules engine. Typically these are a little more lenient than year-round rules when volume is not as high as in the holiday season
  • Survey your trainees about the quality of training (Survey Monkey is easy to use, include multiple-choice and questions and open-text comments)
  • Remind your marketing team you want a list of promotions and promotional SKUs in early November

November:

  • Do what you need to do to get your promotions and SKUs from Marketing (cookies, coffee, backrubs, threats of duct taping their phone—be creative!)
  • Have a pre-holiday pot luck—these folks are going to work hard for you
  • Plan your holiday snacks/recognition
  • Plan to feed staff on Thanksgiving, Black Friday, Saturday, Sunday, Cyber Monday, other high volume days
  • Keep notes during the holiday on how things went—track what worked and what needs improvement (This could be rules, hours on high volume days, unexpected high volume days, promotional sales volumes, seasonal staff quality, manual review processes, communication with your sales/marketing, web development, and customer service teams)
  • Apologize to your significant other

December:

  • Continue to keep notes during the holiday on how things went—track what worked and what needs improvement
  • Keep up the momentum after the holiday weekend
  • Provide more food and both spontaneous and planned “feel good” recognition
  • Start evaluating your seasonal staff for any that you would like to convert to full time for back filling openings (you probably had someone quit between October 1 and Dec 15, right?)
  • Have the staff select an MVP (criteria: most helpful, most hours, most productive, most positive, all around team player, etc.) and reward that person.  The important part is that the staff is doing the picking.
  • Thank your significant other for their support during the holiday
    • Do something nice ( where you give them your time)
    • Promise it won’t be as bad next year (It’s OK if they know it’s a white lie)
  • Take some time off or easy days after Christmas to recharge your batteries and get ready to start over in January

General tips that could be utilized in operationalizing this year-round strategy:

  • Work with your fraud service provider to determine who will be the point of contact for outages or any issues that arise during the busy holiday months
  • Delegate some of this year-round list to your supervisors and leads
  • Plan on changing the seating arrangements of seasoned staff with seasonal temps (once training ends), keeping the seasonal temps in close proximity with full-time analysts will be helpful with manual reviews
  • Make note of IT freezes, both internally and with your fraud service providers
  • Share metrics and reporting with cross-functional teams and executives so they understand the impacts of new product releases and various marketing campaigns to fraud and chargeback rates as well as to overtime hours

While this long list is not exhaustive, it can provide a framework for other retail fraud managers to follow. It could be easy to try not to think about the holiday season until the first marketing campaign starts, but that won’t set yourself or your team up for success and you may be too late to get the resources needed to protect the company from fraudsters looking to take advantage of good sales and consumers looking for a “good deal” on the secondary market. And never forget the importance of showing your staff appreciation and to be a little light hearted, because, while it might not seem like it in the midst of the chaos, you will survive the holiday season and a good working relationship with your team is vital.

Blaise Peters is the senior manager of fraud prevention for NewEgg.com, an online retailer for computer hardware and consumer electronics. Blaise oversees a 15-person fraud team and genuinely enjoys leading and developing the people on the team as much as (if not more than) developing successful and unique fraud prevention strategies for the physical and digital goods sold on NewEgg.com. Blaise has been in retail fraud prevention since 1998, working previously for Sears Holdings Corporation and Sprint.

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