How AI Can Prevent Merchants from Getting ‘Ticked’ Off This Holiday Season
The holiday season is notoriously busy for both businesses and consumers, filled with shopping, parties, games, and special holiday events – all of which means increased sales for retailers, especially for ticketing companies. According to the Harris Poll, 78 percent of millennials say they would choose to spend money on a desirable experience or event over buying something desirable, and 55 percent say they’re spending more on events and live experiences than ever before. This presents a huge opportunity for ticket sellers, as well as an increased risk of fraud.
Fraudsters often target ticketing companies by using stolen credit cards. Liable for every transaction – both good and bad – many of these companies experience high rates of fraud and chargebacks that quickly diminish profits. As ticketing companies grow, their ability to deal with fraud in-house decreases, chargebacks increase and the manual reviews for fraudulent transactions take more time and resources.
To combat the growing problem, ticketing companies need to implement the right technology to prevent fraudulent transactions while still maximizing legitimate sales. Because ticketing agencies are focused on “experiences,” it’s hard to recoup losses once the event has taken place, and businesses are faced with the dreaded chargeback. For example, Kount’s work with TickPick, a leading provider of online tickets not only reduced its chargeback rate by 50% but is credited with helping the company to scale from $25 million to $50 million in revenue – read the full case study here.
To mitigate fraud while increasing sales, ticketing merchants must look for solutions that maximize the use of artificial intelligence (AI). “Set it and forget it” solutions will not allow merchants to take advantage of all that AI has to offer – the real key is to look for a combination of the four key pillars: patented, proprietary technology, vast amounts of data, AI that can make sense of all that data and identify anomalies, and finally, human intelligence. AI by itself is not enough – the key is the addition of the human element to calculate specific tolerance and risk levels for each specific business to provide real intelligence for retailers. Some of Kount’s patented technologies that collect data to use in its AI capabilities include Dynamic Scoring™, Multi-Layer Device Fingerprinting™, and Proxy Piercer, which assess over 200 variables and report in real-time on potential risks.
Solutions that use AI will also affect other key parts of the technology stack used in fraud prevention, including continuously optimizing rules sets based on learned behaviors. Behaviors such as date of purchase, quantity of the ticket being purchased, and even specific event type (concert, sports etc.), can potentially require an entirely different set of rules to combat different types of fraud. Fraudsters have a tremendous ability to adapt and mimic the rules sets that are in place, but through the use of AI that can evolve alongside fraudsters’ methods, businesses can have long-term protection and deter fraudsters in the future.
The combination of AI and human intelligence is critical in addressing fraud problems in the ticketing industry. Ticketing organizations that deploy these solutions are in a better position to mitigate losses and stop fraud. Ticketing organizations can make the most of this holiday season by letting the good transactions in, and keeping the bad ones out.
Learn more about travel, leisure, and ticketing fraud in the eBook "Fraud Takes Off In the Travel and Leisure Industry".