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We need to talk about manual review

Por 15 de setembro de 2016 abril 23rd, 2018 Nenhum comentário

Congratulations, your company has just completed the integration with an anti-fraud solution! Now you only have to wait for the arrival of recommendations on which sales must be approved and which should be denied, due to fraud risk and that is it, right?

Hummm… no, it’s not quite that, actually.

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If we think that way, we will end up ignoring a fundamental activity to ensure the efficiency of the risk analysis – and consequently, the financial health of your e-commerce: manual review.

There are several ways an anti-fraud can analyze an order and reach a conclusion on the risk level of that transaction. But, roughly speaking, it is all about statistics: “this order has X% chance of being a fraud, while this other has 3X%”. But there are cases the system cannot be so sure, and this is where a human agent can help – and quite a lot!

In these cases, every store performing risk analysis needs to consider manual review – whether by an internal team handling this activity or by outsourcing the operation. It is the manual review that can run some tasks technology is not able to (yet), such as seeking information on it on a search site or social networks, or even contacting the purchaser to check a few data. And, once all these pieces of information are available, taking a holistic decision, analyzing the greater picture.

But is a manual review really worth it? Must I really add this cost to my operation?

Answer: Yes. Double yes! And the example below will explain why.

Suppose you have a $1,000.00 sale and the margin on this product is 20%. Your anti-fraud, for some reason (or many), thought that transaction needed to be further analyzed and placed it into the review list. If you do not perform this activity, you have two alternatives:

a) Ignore the anti-fraud recommendation and close the sale. However, if it is a fraud, you will have to bear the loss of $800 for having shipped the product.

b) Not performing the manual review and canceling the order. But if the sale was legitimate, you would not profit $200.

A tough call, right?

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In this case, it is not worth adding the cost (which, lets suppose, is $2 per order analyzed) to help you make the best decision?

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I was sure you would agree! 🙂

No anti-fraud system is capable of offering 100% certainty in an analysis, and eventually, a legitimate order or other can be signaled as fraudulent (or a false-positive).

The manual review is the showdown, and the idea is that the “gray zone” between very good orders and clearly fraudulent purchases be reduced day after day (but not necessarily extinguished). If this process is made in an appropriate way, the answers will be used as input for the system to collect crucial information in order to continue evolving and adapting to your virtual store in the best possible way.

Of course, manual review is an activity that takes time to be completed. It is necessary to consider if your business model allows an order to be waiting for a couple of hours (or days) in line for the data to be checked (read more on the case in this post).

But it is not because you work with real-time risk analysis and cannot leave orders in a line that you should give up manual review altogether. It is important that you set some time to check the suspicious orders, even if it is not possible to revert that transaction anymore.

And no, it is not wasted: you will always need to provide these data to your database, for your risk analysis to continue evolving and being able to have fewer and fewer orders being sent to the review.

Another important factor you must analyze is the type of order that must go to manual review. We designed the example above in a high average sale ticket, and the cost of manual review ended up being negligible when compared to that value. In a $10 transaction, with the same 20% margin, would it be worth to add a $2 cost and be left with no margin at all?

Therefore, each e-commerce must design a strategy to perform the manual review and make the choices that make most sense to their business model and their operation.

What cannot happen is you, after implementing an anti-fraud system in your e-commerce, think the work is done.

If you think like that, you are at risk of your solution never evolving and you are missing a series of legitimate sales.

Yes: your risk analysis would be very similar to the Ferrari with a 1970’s Beetle engine cliché.

We needed to talk about manual review with you. Now it is your turn to talk about manual review internally.

But, if you do have any doubt, do not hesitate in reaching out. Konduto will be pleased in helping you.

About Konduto

We are a startup developing an innovative technology to bar e-commerce frauds. Our intelligent anti-fraud monitors the client throughout his purchase journey in your site and evaluates the transaction in real time – our answer is given in less than 1s! We detect only the purchases that are really suspicious, approving more orders and reducing the costs with frauds. Send us an e-mail on hi@konduto.com

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Felipe Held

Autor Felipe Held

Maratonista, palmeirense, beatlemaníaco e enciclopédia de piadas do Chaves, Felipe foi Head de Comunicação e Marketing da Konduto entre outubro de 2015 e outubro de 2020. Jornalista pela Cásper Líbero e pós-graduado em marketing pela ESPM, trabalhou em redações esportivas de Gazeta, UOL e Terra antes de entrar para o mundo de prevenção à fraude. Já entrevistou Pelé, Maria Esther Bueno, Guga, Guardiola e Bernardinho, mas diz que os dias mais incríveis da carreira foi quando apresentou a duas primeiras edições do Fraud Day.

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