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    How to Minimize Fraud this Holiday Season

    Despite being months away, retailers are already hard at work preparing for the busiest time of the year: the holiday season. The period between Thanksgiving and Christmas can represent up to 20 percent of a retailer’s annual sales, and no one wants to miss out. As a result, many merchants temporarily loosen their fraud prevention rules to process more transactions. They compensate for this by conducting more manual reviews of suspect transactions, which unfortunately leads to an increase in customer insult (legitimate customers being falsely identified as fraudsters) and wrongly declined purchases, both of which increase the cost of doing business.

    Recent data from fraud prevention experts at Experian highlight the advantage of analyzing millions of transactions per day, evaluating risk in real time, and delivering responses in mere milliseconds – without increasing risk or turning away legitimate customers. With this approach, retailers catch more fraud and reduce customer friction, conduct fewer manual reviews and lower operational costs. The following slides will help you improve your approach to fraud prevention and lower costs involved with fraud and ID theft.

    How to Minimize Fraud this Holiday Season - slide 1

    Tips for Improving Fraud Prevention

    Click through for tips that can help your organization better manage its fraud prevention efforts and reduce the costs associated with e-commerce fraud and identity theft, as identified by Experian.

    How to Minimize Fraud this Holiday Season - slide 2

    Rethink Your Approach

    Avoid one-size-fits-all approaches.

    Online merchants regularly make temporary adjustments to loosen fraud-prevention rules; they conduct additional manual reviews to keep up with the increased number of transactions during the holiday season. This does two things: it increases operational costs for the business, and translates to an insult rate (which measures the rate of identifying good customers) of 29 percent to address a 0.9 percent problem.

    How to Minimize Fraud this Holiday Season - slide 3

    Use Your Customer Data

    Make your customer data work for you across the business.

    It’s a common practice for risk teams to use customer data to improve fraud detection, but there are numerous additional channels to assess customer data. Using insights from different channels and devices allows an enterprise to effectively maintain visibility and authenticate identities across the digital ecosystem. Further, by establishing and maintaining a single, persistent customer view, companies benefit from additional, actionable insights throughout the customer journey. According to Experian Marketing Services’ 2015 Digital Marketer Report, 89 percent of marketers globally say that they have trouble achieving a single customer view. By using technology to link data sets and identities together — like customer loyalty data with customer transactional data, social and digital behavior, demographics and more — merchants are getting a clearer picture of who their customers are.

    How to Minimize Fraud this Holiday Season - slide 4

    Unite Fraud and Marketing Efforts

    Bring fraud and marketing efforts together.

    Although this is not an obvious combination at first glance, this relationship can be one of the most powerful in the enterprise. Just last year, a survey by Experian Marketing Services found that 80 percent of marketers planned to run cross-channel marketing campaigns in 2014. More channels, more campaigns and increased volume mean new challenges for fraud-risk managers. Together, fraud and marketing teams can help the top line and the bottom line by preventing bad transactions without impacting the customer experience. The past often can tell a lot about the future. These groups should jointly review past performance with an eye toward both top-line growth (i.e., successful campaigns) and successful risk strategies that complement those growth objectives and use the insight to form future strategies.

    How to Minimize Fraud this Holiday Season - slide 5

    Establish a Customer Experience Team

    Establish a dedicated team responsible for the customer experience.

    By doing so, teams of risk and consumer experience experts can create and maintain a directional and strategic customer view across channels. Formalizing the sharing of data, processes and best practices among these traditionally siloed departments is a way to process more customers while reviewing fewer transactions, catching more fraud and providing a hassle-free customer experience.

    How to Minimize Fraud this Holiday Season - slide 6

    Stay Ahead of Trends

    Stay ahead of evolving market conditions.

    Some things are out of retailers’ control, such as the impending rollout of EMV in the U.S. in October 2015. While most point-of-sale transactions will be safer and more secure as a result, there may well be a rise of card-not-present fraud, as was the case when Europe switched to EMV. This is because criminals will focus their energies on the fraud they can still perpetrate. Being aware and having a plan to react quickly to the ever-changing fraud landscape can significantly increase the chances of thwarting criminals and keeping businesses safe.

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