Custom Reason Codes: A Small Tweak that Delivers Big Benefits
Guest Author: Aaron Chesley, Technical Sales Engineer, Kount
If you are NOT using Custom Reason Codes to classify why orders are being approved, declined or escalated for review, you’re missing a huge opportunity. Below are five good reasons to get started.
- Faster, more efficient manual reviews. If your Fraud Analysts have to take 20 or 30 seconds to write individual notes or comments about each reviewed order, you could do better. By building a standard set of Custom Reason Codes, you’ll make it easy for Fraud Analysts to quickly identify why a transaction was resolved in the way that it was. Your Fraud Analysts won’t get as fatigued, even while they handle more reviews in the same amount of time.
- More consistent results. Custom Reason Codes help new or inexperienced Fraud Analysts “stay in the correct lanes” and focus on the factors most likely deliver an approve or decline decision quickly. This will help them avoid going down blind alleys or wasting time on less effective measures.
- Better customer service. Custom Reason Codes associated with specific rules that trigger reviews can help you prioritize reviews and deliver the best customer service. For example, the review queue can be set up so transactions with expedited or overnight shipping are first to be reviewed, ensuring those customers get their orders ASAP. Or, big-ticket orders can be prioritized, so your most valuable customers get your most valuable service.
- Better reporting and better decisions. Custom Reason Codes allow you to quantify the variables that determine which orders get reviewed, and the reasons for their approval or decline. Using this data, you can determine which techniques are the most efficient based on empirical evidence. For example, Custom Reason Codes could enable you to know that Facebook searches deliver 80% resolution compared to email or text inquiries that deliver 90% resolution. Knowing that Facebook searches take half the time and deliver almost immediate results, you could decide to make Facebook searches the first step in every manual review.
- Reduced operational expense. By saving time with faster, more efficient manual reviews, you’ll reduce costs. For example, a Fraud Analyst making $15 an hour costs about 33 cents a minute when fully burdened with Social Security taxes, Workmen’s Comp, Unemployment, etc. A typical merchant processing 1,000 orders a day ($55 average order/$20 million per year) will review about 98,550 transactions annually at a ballpark cost of $160,000 (average 5 minutes per review). If Custom Reason Codes can improve efficiency by 20%, that would save over $30,000 a year. Further, Custom Reason Codes can help identify manual review techniques that are highly successful and apply those via automation. For example, suppose you are a vitamin supplement online retailer and a specific shipping address in Afghanistan repeatedly triggers a review because it falls under a rule to review international orders. If your Custom Reason Code for all those orders was stated as “Approved-US Army base,” you could decide to set up a custom rule to automatically approve those orders and avoid manual reviews.
Most merchants typically use 6 to 12 reason codes, depending on their business and the nature of their transactions. Four basic Custom Reason Codes can get you started:
- Auth decline
- Approved-contact customer
- Declined-couldn’t contact customer
Of course, you can enhance these with specifics that apply to your process. Here is just a short sample list to get you thinking:
- Approved-Facebook confirmation
- Approved-email confirmation from customer
- Approved-SMS text confirmation from customer
- Approved-phone confirmation from customer
Custom Reason Codes are easy to implement with Kount. More importantly, they’ll help you take your manual review process to the next level. Want to discover other ways to get better at manual reviews? Download the e-book “7 Best Practices to Become a Manual Review Rock Star.”