Rainbow Apparel, a clothing retailer ranked No. 710 in Digital Commerce 360’s Top 1000 ranking of the largest North American online retailers by web sales, has been using anti-fraud software Signifyd for about two years to distinguish legitimate orders from fraudulent ones. According to David Cost, vice president of ecommerce and marketing at Rainbow Apparel, the software has been key to accepting the right orders.
Rainbow Apparel, a clothing retailer ranked No. 710 in Digital Commerce 360’s Top 1000 ranking of the largest North American online retailers by web sales, has been using anti-fraud software Signifyd for about two years to distinguish legitimate orders from fraudulent ones. According to David Cost, vice president of ecommerce and marketing at Rainbow Apparel, the software has been key to accepting the right orders.
Rainbow Apparel used to flag suspected fraudulent orders manually, Cost says. Ten years ago, the retailer was rejecting about 2% of all orders. Today, Rainbow only rejects about one-half of a percent of orders. Cost says that the goal is to only reject legitimately fraudulent orders, and that “there’s no other way for us to be able to accomplish that goal” other than automation and AI on a large scale.
Signifyd has access to data about consumer identities based on purchases from other retailers, giving it an edge in detecting fraud. Chief business officer Indy Guha said that “we don’t have to guess if someone’s identity is breached. Once it’s compromised, that’s compromised everywhere in our network.”
The biggest challenge for Rainbow Apparel is allowing legitimate customers to make purchases despite fraud protections. Cost said that non-fraudulent purchases from lower-income shoppers are more likely to face issues at checkout, as Rainbow Apparel primarily serves customers “in the lower half of the income spectrum.” To combat this, every rejected order is reviewed by a member of Rainbow’s team, and can be resubmitted to Signifyd for a new check.
Retailers are adopting new measures to fight ecommerce fraud, according to the 2023 Global Fraud and Payments Report from the Merchants Risk Council. The report found that ecommerce retailers spend an average of about 10% of revenue managing payment fraud, and that the percentage of ecommerce revenue lost to fraud globally is down from 3.6% in 2022 to 2.9% in 2023. Signifyd’s State of Fraud Report for 2023 found that for every $100 in in fraudulent orders, retailers lose $207. That loss comes from the cost of processing, chargeback fees, fighting claims, and other charges.
Sources: https://www.digitalcommerce360.com/2023/04/20/rainbow-apparel-anti-fraud-technology/
