Case Study: Alligator Performance

Alligator Performance deployed Signifyd to fight fraud and improve its customer experience.

95%

Reduction in Cases Reviewed

20%

Increase in Accepted Orders

0

Chargeback losses

Alligator Performance turned to Signifyd's Guaranteed Fraud Protection to eliminate fraud chargebacks and free up employees who had been conducting time-consuming manual order reviews.

Alligator Performance general manager Jason Kuenkler says FBI agents routinely ignore his calls for help because his online fraudsters aren’t stealing enough.

“I had one FBI office locally in the tri-city area of Kennewick, Pasco and Richland in western Washington state who wouldn’t even go to the address. They said they were too busy to go look. Thieves had taken — between seven different companies — like $35,000 in turbos,” says the general manager of the Coeur d’Alene, Idaho-based diesel automotive parts retailer.

“I’ve literally called the FBI in cities and said, ‘Hey, this address is fraudulently ordering. I have four different businesses that have sent products there and all of it’s been stolen. Can you go check it out?’ ‘No, I will not. It’s not enough money for us to go look at,’” reply the agents, Kuenkler says.

It wasn’t always like this for Kuenkler. When he worked for a $100-million-dollar-a-year online electronics vendor, they helped the FBI break up an online fraud ring. “Fraudsters were ordering $100,000 in camcorders and we actually set up a sting with the FBI and caught the ring of people.” But size does matter, he says. “In our industry, the FBI won’t touch it if it’s not over $100,000.”

Banks, payment processors and law enforcement are no help either, says Kuenkler.  “We’ve had recorded phone calls with the bank where the cardholder is on the phone and they’re telling the bank, ‘Hey, I got it. I’m not giving you your money back. I’m charging you back anyways. Too bad. I’m keeping this stuff for free.’ That’s a recorded call and we still lose the chargeback. So, we decided we had simply enough. The bank is going to side with the customer every single time, even when it’s illegal. It’s totally set up for the retailer to fail. If you don’t watch your fraud, it can put you out of business.”

Two years ago, the stealing accelerated to a pace at which online fraud was costing Alligator Performance, a multimillion-dollar-a-year-business, over $100,000 annually. “We were going to double that number this year. That’s why we started looking at other options.”

Signifyd became that option earlier this year. Since then, every order received by Alligator Performance has been evaluated with machine learning in real-time and then compared with data Signifyd collects from more than 5,000 merchants and third-party data providers. Now Alligator Performance’s online business is secure and every order is financially guaranteed against fraud and chargebacks by Signifyd.

Kuenkler says he used to assign four full-time staff members to review orders manually at a substantial out of pocket cost.

“We would determine just by looking at an order that it doesn’t look right: whether the email is suspicious, or the name and the email didn’t match, or the city that the person was saying they were in didn’t match the phone number on the order. We were checking all of those facts online against Facebook messages, trying to figure out if the customer was a real person. I would probably spend a couple of hours a day, myself, just on them.”Kuenkler and his staff scanned the white pages and did reverse lookups to try to ascertain an order’s legitimacy. They would also call the phone numbers on orders to determine if the customer’s phone number was real.

“It’s quite the process to track all of that information down,” says Kuenkler. “And when you’re talking about a hundred-plus orders a day, 20 percent of those orders are problems. Those 20 orders can take hours to figure out what each one is about.” Since partnering with Signifyd, though, Kuenkler says he’s been saving “more than Signifyd costs us.”

“With Signifyd we watch the ones that are declined and we go back there and get information supplied by Signifyd to either make a confirmation and have it re-reviewed, and verified, or we cancel the order and refund the customer so we don’t get hit with a chargeback.”

Sales that would have been rejected before are now approved. “Maybe 20 percent more,” Kuenkler says, “that we would not have had before because we would have been watching closer and we wouldn’t have accepted those without the level of detail that Signifyd is supplying.”

Alligator Performance’s customers also get their products more quickly. “We don’t have to wait for responses outside of us being able to supply the information. After Signifyd got through the first month or so of learning how quickly we deal with orders, they’ve done a good job in re-reviewing an order when we add information and so what could have taken a couple days now takes a few minutes.”

“Speeding up the process for our customers is a big part of our business. We’ve been around for over 12 years and we’re known to be one of the fastest shipping companies in the U.S. because we have warehouses spread across the country to get product to customers quicker. But we were held up missing our window of shipping because we were waiting for information or trying to verify something. Now we’ve sped that process up with Signifyd and it just helps people to feel more confident purchasing from us and knowing they’re going to get their product quickly and they don’t have to worry about that – there isn’t an equation that they have to figure out when they’re trying to buy from us now.”

“We’re still going to get hit with those fraudulent purchases but not filling those orders is what we were really watching for. And that’s the reason that we reached out to Signifyd.”

Chad Hall, previously a highway construction company foreman and diesel truck owner, came up with the idea for Alligator Performance when people were constantly asking him about his beloved diesel. Where did he get this part or that part?

“He’s like ‘Oh yeah, I could probably get that for you,’ and he started selling parts off the back of his truck,’’ Kuenkler says. Hall was tired of construction at the time and he saw an opportunity. He and Jayme Kemmish, a marketing expert and his wife at the time, came up with the name Alligator Performance over some wine.

“Alligator was a great name for a company that people would remember. We get asked daily, ‘What do we do?’ and I say, ‘We grow alligators up in the mud puddles up here.’ They’re like, ‘Really?’”

 Alligator Performance’s’ core customers are 18 to 34 year-old males from all over the world who like to customize, soup up and “trick out” diesel cars, trucks and 4X4s. “We sell 99 percent of our products in the U.S., but we also have customers in Jamaica, the U.A.E, Africa, Australia, Finland, Denmark and other parts of Europe,” Kuenkler says.

“A lot of people don’t want to deal with the factory equipment they’ve got in there. They want to modify it. Or they’re in Australia and they’re running an Australian version of one of the rigs that are here and so they want to play that up, too. We’ll happily oblige them as much as we can.”

Of the 27,000 different parts Alligator sells, Kuenkler says “a lot of guys buy intakes and tuners for their trucks to help them be more efficient and to help them eek out a bit more performance than they have right now.”

He says online thieves used to take “anything that’s easy: tuners, typically. They try to steal electronics because they expect them to move quickly. But we’ve also seen them take random things like tires because they can get rid of them easily as well. Typically, when somebody’s trying, they’ll start with small electronics. So they’ll start in the $400 to $500 range. And then, if they get one of those through, then they’ll order a couple more. Then they’ll order some other products to try to set a precedent and see if they’ll be able to get items shipped to them.”

“We’re friends with a lot of the people that are our competitors so we actually talk about this issue in the industry. If they are getting hit they’ll usually call myself or the owner and let us know. Or we’ll call them and let them know to watch out for these people’s names.”

With Signifyd on the job Kuenkler says the time he would have otherwise spent weeding out fraudulent orders he now spends “supporting our customers and growing our business.”

And the four front-line salespeople who used to also fight fraud have gone back to taking phone calls instead of playing detective.

Kuenkler says sales are up 20 percent since the beginning of the year. “I’m not sure if that’s all due to Signifyd — there are other irons in the fire — but Signifyd definitely has a lot to do with it.

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Signifyd’s Reimbursement Policy

What’s Covered

We cover chargebacks connected with fraud or unauthorized charges, often due to:

  • Stolen account information (account takeover)

  • Stolen financial information

What’s Not Covered

We do not cover chargebacks due to errors made by the merchant, card processor, or shipper, like:

  • Item not received, not as described, or defective/broken

  • Refund not processed

  • Duplicate charges

As long as the chargeback meets the above criteria, we'll cover it and reimburse the full chargeback amount, plus any associated fees.

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