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A Balancing Act: Merchants Struggle with the Fraud Prevention Equation

Guest blog by Jeff Liesendahl

Just think, not that long ago, a security guard positioned at the front door and a video surveillance camera were all merchants needed to protect their businesses.

How times have changed. With the rapid expansion of e-commerce as a profitable and oftentimes preferable way for merchants and customers to transact business, security and fraud prevention are clearly no longer as simple as a guard manning the front door.

Increasingly, merchants are realizing that finding the right balance of protection that enables fulfillment of legitimate customer orders while also flagging fraudulent ones can be a difficult task. Although too little protection can open the door to fraudsters, too much can frustrate customers to such an extent that they take their business elsewhere. As a result, finding the right level of fraud prevention has become core to merchant security efforts.

Accertify recently commissioned a study of U.S. consumers to see how people perceive and react to online fraud. We found that 28 percent of the American consumers surveyed have encountered a fraud protection system that unnecessarily delayed or denied their transaction. These results confirm what we’ve seen more and more in our own business: merchants falling victim to the misconception that overly rigorous fraud solutions are best for their business.

As consumers told us in our study, less is more. Interestingly, while being inconvenienced by a delayed or denied transaction may seem to be a minor nuisance, it’s actually a huge customer service issue. According to our research, consumers are less willing to give merchants a second chance after an experience like this, and frequently will take their business elsewhere.

More than 35 percent who reported encountering a delayed or denied transaction said they would penalize the business responsible by moving or consider moving their business to a competitor, while 11 percent immediately fled for competitors.

To protect against fraud while avoiding customer dissatisfaction, fraud prevention should be considered on a case-by-case basis, because not every business is subject to the same risks. With that in mind, a customizable platform that can be adjusted easily based on a business’ various sales channels, product offerings and other industry-specific risks will not only reduce the resources necessary to manage in-house programs, but also increase the speed and efficiency of the review process.

As consumers continue to flock to online payment channels, it is becoming increasingly apparent that they value the security of online transactions. Therefore, it is more important today than ever for merchants to have an effective yet balanced fraud prevention solution in place.

Although no fraud prevention solution fits all sizes, it is critical for the customer experience that merchants implement a flexible, customizable platform tailored to their specific business needs.

Jeff Liesendahl is president of Accertify, an American Express company. For more information, visit www.accertify.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

 

Home-Based Agents Provide Increased Service Quality and Lower Expenses for Retailers

By Rob Duncan

The Internet has made comparing prices before buying easy. Consumers love getting the best deals and are more price-conscious than ever before. Unfortunately, more comparison-shopping can mean lower profit margins and increased competition for many of today’s retailers.

Retailers must find new ways to operate faster and leaner. Every area of a retailer’s business is now under intense scrutiny, and divisions previously thought of as “expense” centers are being required to either generate revenue or be eliminated, including call center operations. To reduce cost without sacrificing service quality, many retailers are turning to home-based agents.

Whether it’s establishing an internal at-home workforce or partnering with a virtual at-home contact center service provider, home-based agents have been shown to save money through higher quality service, more efficient operations and higher revenues. Here’s how it works:

1.         Hiring From Anywhere. The virtual contact center employee model allows organizations to recruit and hire the best talent, wherever it may be located. This advantage is particularly appealing to retailers because it allows them to target professionals with specific relevant experience. For example, a retailer can hire agents who have purchased specific products online or shopped at certain locations.

2.         A Different Breed of Agent. With an average age of 40, more than 80 percent college-educated with 15 to 20 years of work and life experience, at-home workers tend to be more mature and empathetic. Connecting on a personal level with customers results in more efficient calls, higher first-call resolution rates and improved selling capabilities.

3.         Lowering Costs. Facility costs, furniture and fixtures, property taxes, utilities and physical security expenses can exceed $10 million annually for many large centers. Instead, modern technology and networks can be used to create a virtual call center environment. Using a secure desktop, phone and Internet connection, assigned agents are routed calls and have instant online access to all the necessary support resources.

4.         Staffing Agility. Unlike traditional brick-and-mortar environments, an at-home workforce is designed to meet the flexibility and scalability requirements of the retail industry. Whether it is ramping up for the holidays or handling variable call volumes, with home-based agents it is possible to adjust staffing levels in real-time to ensure calls are always answered quickly.

5.         Workforce Reliability. Dispersed at-home workforces and a flexible scheduling environment helps ensure that agents will be available to handle call volume fluctuations, preventing service interruptions in today’s highly competitive, 24/7 business environment. Flexing the workforce in real-time to handle call volume fluctuations helps keep service levels high, revenues up and costs down.

Businesses can lose up to 10 customers for every one that complains of poor service. By using highly qualified, home-based agents, customers will receive outstanding service, and retailers can maintain financial stability despite increased pricing pressures and competition.

Rob Duncan is COO of Alpine Access Inc., a contact center and customer relationship management outsourcer. For more information, visit the Alpine Access website at www.alpineaccess.com.