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Top 7 Ways Manual Review Kills Your Bottom Line

posted on: Wed Aug 06 2014

The only thing worse than being hit by fraud (both by fraudsters and your bank’s chargeback policies) is investing resources in manual reviews that should be focused on growing your business. The right online fraud solution, used properly, should essentially eliminate the need for the manual transaction reviews. How significant would eliminating this tedious, inconsistent process be to your business? Here are all the ways manual review kills your bottom line:

  1. Labor cost: The most notable investment of manual review is the staff you need to hire and train to determine whether a flagged transaction truly appears bogus. When you are a small but mighty digital content provider like CD Baby, this means shifting a responsibility that took 80% of a key Finance leader’s time to a part-timer. In larger orgs, that translates into a much more effective, and trimmer, fraud team.
  2. Inconsistent methodology & application: No two people are entirely alike, nor are their experiences from day to day. While we’ll stop short of comparing them to snowflakes, these differences can lead to different interpretations of the same information. Someone new to the job or simply having a rough day may give a thumbs up to a sketchy transaction when their teammate would have caught it easily, translating into lost product and a number of other headaches.
  3. Fraud system costs: While we’re on the subject, no two fraud systems are alike and neither are their cost models. Some may involve added training, embedded resources you are paying in addition to your fraud team, tying up IT implementation resources and other added costs in addition to what you pay for the service itself. While you don’t want to skimp on protection, it can be easy to over-invest in solutions with hidden costs.
  4. Cart abandonment: Instant gratification is the norm online, so when a potential customer doesn’t get their order confirmed in a timely manner they will go elsewhere. Just ask Reed’s Jewelers, who not only booked an incremental 2,300 orders over the past 14 months but also reduced time spent on manual reviews by 85% after implementing Kount. Most importantly, they aren’t having to call customers and have them talk to their bank and jump through extra hoops just to make a purchase.
  5. Lost international sales: Many transactions are simply flagged based on the country of origin and more than twice as many are denied during manual review according to CyberSource’s 14th Annual Online Fraud Report. While fraud can originate anywhere, so can the opportunity to grow your business in new markets. If you spend too much time reviewing or denying legitimate transactions because of geography, you could be missing significant sales.
  6. Time: According to the same report, 75% of orders reviewed manually are approved anyway. With the right systems and rules in place, the significant chunk of time spent on reviewing legitimate orders can be automated, leaving you the opportunity for better …
  7. Resource allocation: Imagine shifting the headcount used for your manual review processes today into roles focused on growing sales. No matter the size of your organization, more resources focused on your customer can only lead to better results.

Do any of these ring true for your organization? Spend 15 minutes with us on a free fraud analysis and learn other ways to beat fraud and boost sales.