Preparing for a peak season unlike any other

Lockdowns and other pandemic-related considerations have led to a significant shift to online shopping, a habit that for many consumers, may well be here to stay. A second pandemic wave could also lead to further restrictions, causing another ecommerce surge.

Many online retail businesses can therefore look forward to a good peak season. But to make the most of it, they need to take account of several key issues.

Fraud team capacity

Many businesses have imposed a hiring freeze. So fraud teams may not be able to employ the usual temporary staff to help deal with the peak season rush. Some teams are therefore cross-training people from other departments. Others are improving overall efficiency by adjusting screening rules to send fewer orders for manual review.

Working as efficiently as possible is also important for staff wellbeing. With the acceleration of ecommerce, fraud teams may have been working flat out since lockdowns began, without the usual post-summer-sales recovery period. Managers are rightly concerned about the potential for staff burnout and the impact on individuals, the team as a whole, and the quality of reviews.

Behavioural shifts

Based on historical analysis, most online retailers will know what changes to expect in their customers' behaviour on sale days, such as a shift in the time of day when transactions take place or increased basket size. This year, however, they should also look out for pandemic-driven changes in purchasing patterns that may be driven by lockdowns or other restrictions. 

Merchants should also be aware of a potential increase in identity morphing (defined as multiple data points of an identity, which are linked to a single data point. For example, multiple email addresses linked to a single device fingerprint).

Although typically a sign of fraud, it also happens when genuine customers place orders on behalf of friends and family, and add multiple cards or shipping addresses to their accounts. So it may be appropriate to relax fraud rules around identity morphing to avoid rejecting too many good orders.

And as in any peak season, fraudsters may take advantage of greater screening leniency on particular days. They'll be aware of the resource constraints affecting some merchants, and will doubtless look to exploit that wherever they can. Gift cards could be a particular target, as there's generally less time for merchants to review these purchases. 

Data will of course be key to understanding shifts in both customer and fraudster behaviour. For a fuller picture, merchants will need to analyse a combination of data from previous peak seasons with data from the lockdown period earlier this year. 

Expect the unexpected

Savvy merchants always have contingency plans in place to cope with unexpected events during peak season. But 2020 could turn out to be less predictable than previous years, so a creative ecommerce solution and flexible fraud strategy will be more important than ever before. 

Steps a merchant can take include setting up an emergency fraud strategy that can be implemented if, say, a VPN outage means that home-based fraud team members can't access the screening system. Businesses should also de-pollute negative lists, and update good customer lists to streamline the checkout experience for them. It's also worth reviewing legacy rules to identify ways to lower the manual review rate, and adjusting velocity rules to account for the likely rise in orders on sale days. Testing any rule changes as thoroughly as possible is also advisable. 

You'll also want to be confident about the stability and robustness of your payment platform overall. 

The power of automation 

Automating fraud screening as far as possible — through machine learning and scoring models — can help to reduce the burden on your fraud team. That's an especially important consideration if you've been unable to recruit extra staff this year.

If your fraud management solution allows it, take advantage of the ability to switch to automated decision-making when review windows are expiring, or if you need to prioritise orders for certain products. This will help you manage the increased volume of peak season transactions and meet SLAs more easily.

Naturally, working with a global provider makes automated screening even more powerful, as the system has many more transactions to learn from. At Cybersource, we're taking this a step further, building on our global view of customer transactions and behaviour, and developing capability that helps you confidently identify whether new customers are genuine.

Conclusion

With the right plans and resources in place, and a sufficiently flexible approach, we believe merchants can enjoy a successful peak season. Your fraud screening solution will play a critical role in that success, so make sure yours is robust and stable, and supports the creative strategy this peak season will call for.

These materials and best practice recommendations are provided for informational purposes only and should not be relied upon for marketing, legal, regulatory or other advice.

About Mark Strachan

Mark is the business owner for the EMEA Managed Risk portfolio at Cybersource and a fraud risk professional with over 12 years experience in the payments and banking industry. His current role as EMEA Managed Risk Principal at Cybersource allows him to work closely with enterprise clients on strategies to reduce risk associated with fraudulent activity and optimise revenue. 

About Cybersource

Cybersource helped kick start the ecommerce revolution in 1994 and haven’t looked back since. Through global reach, modern capabilities, and commerce insights, we create flexible, creative commerce solutions for everyday life-experiences that delight customers and spur growth globally. All through the ease and simplicity of one digital platform to manage all payment types, fraud strategies, and more. Knowing we are part of Visa and their security-obsessed standards, you can trust that business is well taken care of – wherever it may go.