August 24, 2016
CNP Expo: Adding Insult to Injury
May 21, 2015
Businesses often don’t know how many orders they have declined in error, but a high number are false positives, according to panelists speaking to a packed session on the final day of the 2015 CNP Expo in Orlando, Fla. And, companies that don’t get a handle on a high decline rate could experience significant downside from a reputational standpoint, said Colin Sims, COO at Delivery.com, which delivers food to homes.
“We don’t have the luxury of fixing false positives,” said Sims. “If a customer gets a false positive, they aren’t going to come back to the site. And, after the data breaches last year, we experienced an increase in fraud four-fold. I’d say our sophistication level was pretty low at the time.”
To combat the problem, Delivery.com outsourced the effort.
Unlike Delivery.com, which Sims said doesn’t have the bandwith to address the problem with every customer affected by it, other companies have the resources to try to clear up declined orders in an effort to win back those customers.
‘”We allow the card issuer to reach out to the cardholder,” said Keith Briscoe, chief marketing officer at Ethoca. “A significantly larger-than-expected portion of those orders are good.”
Expedia is another company that has the luxury of having time to re-examine declined orders, said Roberto Girolami, program manager at the travel-booking website. The ones that don’t, Briscoe said, could be seriously underestimating how many false positives they actually have. In his conversations with merchants, most estimate that 10 percent of their rejected orders are false positives.
“Actually, we think it’s much higher than that,” he said. “Striking that balance between eliminating fraud and accepting risky orders is absolutely critical.”