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Signifyd moves beyond payment fraud to tackle chargeback confusion

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Signifyd announced today that it is expanding its Commerce Protection Platform to give online merchants the tools to manage one of the most prickly customer experience challenges: Determining when a customer is being dishonest and taking advantage of a retailer’s customer-friendly policies.

The launch of Signifyd Chargeback Recovery means the company now provides a comprehensive solution for every type of chargeback abuse, whether it is the result of a sophisticated fraud ring armed with stolen identities or a mischievous teenager taking advantage of easy access to a parent’s credit card.

So called “friendly fraudaccounts for more than $15 billion annually in handling chargebacks losses,, but merchants need to be selective about which chargebacks they are going to contest. Some merchant chargebacks are legitimate.

Taking a broad approach, challenging every online payment chargeback consumers file, is a sure way for retailers to end up fighting with legitimate customers, who for whatever reason never received an order or who honestly did not recognize the merchant description on their credit card statement.

There are few more effective ways to lose a customer than dragging a loyal shopper into a proceeding that questions his or her honesty. In fact, a Signifyd consumer survey, conducted by Survata, found that 38.2 percent of consumers said they would give a retailer one more chance after having a bad experience, before ending their relationship with that retailer. Nearly 15 percent said they wouldn’t go even that far. One strike with these zero-tolerance consumers and the retailer is out.

And no doubt we can all stipulate that being an innocent customer and being called a crook qualifies as a bad experience.

Guaranteed fraud protection is a key to a better customer experience

Signifyd is already the market leader in providing fraud protection — protection that combines big data, machine learning and domain expertise to identify fraudulent orders within milliseconds of them being placed. And it promises to make merchants financially whole for any approved orders that later turn out to be fraudulent.

Even with fraud at the checkout solved, the company realized through conversations with its customers that chargebacks resulting from unauthorized charges were only a part of what was preventing retailers from growing and prospering as much as they could.

“During business reviews with our merchants, we noticed that managing the remaining, non-fraud chargebacks was still a significant issue for many merchants,” said Gayathri Somanath, group product manager at Signifyd. “Analyzing the problem further, we believed that we could streamline the process for them to ensure their customers are treated well, while abusive consumers are stopped and revenue lost to them is recovered.”

Gayathri Somanath

Gayathri Somanath

Signifyd Chargeback Recovery is more than a tool. It’s an approach to customer relationships that allows merchants to relate to shoppers with an attitude that a customer with a complaint needs to be heard and should be considered on the right side of the conversation. Chargeback Recovery relies on Signifyd’s data network of thousands of customers serving 250 million shoppers around the world and its advanced artificial intelligence to identify in milliseconds how best to address each individual chargeback automation.

Legitimate customers will be recognized as such, while abusive consumers, attempting cyber shoplifting, will be challenged with customized evidence letters designed by domain experts and powered by enriched data derived from the original transaction.

Chargeback protection from beginning to end

The product and associated services are a result of in-depth discussions between Signifyd and its customers and a series of trials and tweaks that resulted in a solution that means Signifyd can offer its customers a chargeback fraud protection continuum that covers them from the point of purchase to well beyond the time an order has been shipped and received — or not.

“We tested various iterations with beta customers until we got it right and are excited to announce its general availability today,” Somanath said. (To learn more about Signifyd Chargeback Recovery, join Somanath for a product launch webinar on March 4 at 10 a.m. PST.)

The ongoing discussions helped Signifyd develop an approach to managing chargebacks that aligns with merchants’ goal of reducing the number of chargebacks that need to be analyzed and disputed in the first place. Chargeback Recovery includes regular business reviews between retailers and Signifyd domain experts who can offer advice on fine-tuning return policies, knowledge-base articles and other parts of a merchant’s operation that could lead to retail chargebacks if not properly executed.

The powerful combination of constantly learning machines and human expertise ensures that retailers are providing a memorable buying experience for consumers while still protecting themselves from fraud and the margin-crushing effects of fighting chargebacks.

Feature photo by iStock, portrait by Signifyd.


Mike Cassidy

Mike Cassidy

Mike is the head of storytelling at Signifyd. A former journalist and a retail geek, he covers ecommerce and the way technology is transforming digital commerce. Contact him at [email protected].