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Rule-on-Rule Crime: why less fraud rules equal more sales

posted on: Wed Aug 13 2014

Football season is nearly upon us. As players work into football shape during scrimmages and preseason games, fans may see defensive teammates inadvertently tackling one another while aiming for the ball carrier. That simple miss usually takes both players out of the play and leaves the offense with a wide open path to score.

The same is true when your fraud rules pick off one another, something we call rule collision. When you have too many fraud rules set up in your system, or multiple ones with a similar focus, you’re either increasing your exposure or missing sales.

Say you have one rule that flags a transaction above $50 made on a specific device like an Android tablet. Another geography-focused rule greenlights all transactions in the United States for orders below $100. And another rule won’t allow product to be purchased in one country and shipped to another country even if addresses, email and payment methods are legitimate.

So what happens when a customer in the United States uses their Android tablet to purchase a $75 bluetooth speaker for their parents in Canada? Two out of three rules will deny or delay the transaction, but one blanket rule will allow it. So which rule trumps the others? Will it be a sale, a time-intensive manual review or a denied opportunity?

More importantly, why do you need so many rules in the first place?

The truth is, you don’t. We’ve seen customers with rules ranging well into the triple digits. Kount customers average around 20 total. Certainly every customer has unique elements within their business model that shape how rules should be established, but if you have so many rules you can’t remember them all then you need to take a longer look at your fraud system. Here are a few suggestions when it comes to selecting the right system and fraud rules:

  • Leverage what works: Your fraud solution provider should know what rules work and which ones don’t based on their customer base. Better yet, this collective wisdom should be included within the technology and interface (as our client eGifter notes would take years to develop) so you can select what makes sense for your company and customize as needed.

  • Seek intuitive solutions you can manage: After minimal training you and your team should be able to easily create, adjust and fine-tune rules. Just ask the team at Luggage Pros. While you should always have a vendor resource to help along the way, being dependent on them to change a rule is a waste of time and money.

  • Save yourself time: Ultimately the purpose of a fraud solution is to free up you and your team’s time. If your system isn’t minimizing the burden of time and resources devoted to manual review like our AutoAgent, then you need to look at alternatives that do.

For more information about how Kount’s rules engine works, please visit our technology overview page. Want to dive deeper into how fraud prevention can help you increase sales? Sign up for a free 15-minute fraud analysis.