Home shopping
Evidence of first party fraud can be found throughout the home shopping sector. Increasingly, a cross section of consumers are taking advantage of weaknesses in retailers' order management processes and the trust placed in them as honest consumers by the retailers' business models. They've learned how to 'work the system'.
Examples include:
- Accepting attractive introductory offers, committing to a club or continuity program, and then defaulting on early shipments.
- Ordering goods, claiming they never arrived and then requesting a replacement or refund.
- Claiming to have returned goods which have not been received by the retailer.
- Entering into formal credit agreements, then defaulting on the early repayments.
The financial losses can be significant, with bad debt rates running as high as 20% on average. Fraudscreen can predict these behaviours and prevent a significant portion of these losses, in some cases by as much as 50%.
Managing risk
For smaller home shopping businesses, managing financial risk can be difficult and expensive. Traditional credit scoring can be costly in terms of price and the impact on recruitment levels. The requirement to ask for date of birth can reduce response rates significantly. cipher:risk from Fraudscreen represents a highly predictive, effective and affordable alternative.
For those using traditional credit scoring techniques, Fraudscreen can enhance accept/decline decisions on marginal scores, often turning a potentially unprofitble decision into a profitable one.
Marketing improvement
Whilst Fraudscreen will reduce risk, it doesn't necessarily mean a reduction in the number of new customers recruited, or in your sales revenues. cipher:marketing will segment your audience according to potential value, allowing you to tailor your messaging, offers and payment terms. It also enables you to expand your marketing volumes and sales revenues by using the best segments as a mechanism for driving up-sell and cross-sell initiatives; or improving marginally performing media channels and datasets.
Collections improvement
The dunning process can often be expensive and ineffective, especially when a generic approach is taken for all customers. Being able to segment those entering the cycle according to predicted 'payment intent' will help to improve cash flow and profits. Using cipher:collections will help you to focus your resources and budget where it will be most effective, speeding up payments and reducing your overall cost per £ collected.
