Backcountry.com moves more nimbly to approve transactions
August 19, 2015 04:47 PM
Manually reviewing high-risk e-commerce transactions takes time and can cost an online merchant money in lost orders and annoyed customers. Being able to quickly verify that customers are who they say they are matters.
Outdoor gear e-retailer Backcountry.com spent six months doing A/B testing on how it reviews high-risk transactions and decided, after getting feedback from its nine-member team that reviews flagged transactions, to change the service it uses. “The majority of orders we review are legitimate, and switching to Whitepages Pro Identity Check allows us to verify that a little faster,” says Jamon Whitehead, senior manager of risk and payment operations at Backcountry.com.
The technology, integrated through a web portal linked directly to the retailer’s manual review interface, required no additional training for employees, no engineering to implement, nor even copying and pasting, Whitehead says.
Tom Donlea, Whitepages’ director of e-commerce, says Pro Identity Check for Web combines six to 10 application programming interface calls into one query, reducing the steps needed to verify if a consumer is in good standing or someone trying to commit fraud. The process has deep links, which are a way to access information normally hidden within a company’s database.
If a retailer is processing an order and there’s something strange about it—maybe the billing and ship-to addresses don’t match—retailers’ information about a customer automatically flows into Whitepages’ system and returns with the intelligence they need to decide if an order is legitimate, Donlea says. “They’re saving 20-30% of time on each of the decisions they need to make,” he says.
From the consumer’s perspective, nothing looks or feels different with the Backcountry’s updated identity checking, Whitehead says. After a customer places an order, the same confirmation screen appears and a confirmation email is sent. The transaction passes through the automatic screening process, where about 5-15% of sales will be reviewed. Those transactions fall into a queue, prioritized by ship date, and the goal is to have all those orders cleared by 5 p.m. daily, he says.
Chargeback and fraud rates at Backcountry.com were low to start, and it’s difficult to say if there has been a measurable impact, Whitehead says, but “the main point for us when we were reviewing functionality was reducing ‘customer insult.’” The insult rate is the percentage of times a legitimate customer was denied approval.
With its previous vendor, which Backcountry declined to name, “sometimes we were getting no response with other third parties, especially when trying to connect phone numbers to names,” Whitehead says “Responses now are more complete. Once we were on the Whitepages interface, we were more quickly linking between an address, IP address and phone number, plus Google mapping options.”
The new service also is more cost-effective, he says, because Backcountry pays on a transactional basis, so it’s not paying for views it doesn’t use. He declined to say how much the service costs.
Donlea says pricing is determined by volume and term. "We specifically price the service in a manner that ensures it is just a fraction of the expected average expense of fraud," he says.
Backcountry.com was an early entrant to e-commerce, opening its web store in 1996. In 2007, Backcountry.com was acquired by Liberty Interactive, which also owns home shopping TV and web retailer QVC Inc., No. 15 in the Internet Retailer 2015 Top 500 Guide.
In July private equity firm TSG Consumer Partners acquired Backcountry.com. Terms of the deal weren’t disclosed. Backcountry.com also operates five other niche web stores—CompetiveCycle.com, MotoSport.com. Bergfreunde.de, SteepandCheap.com and WhiskeyMilitia.com.