No matter what industry you’re in, the size of your business, or the audience you serve, one thing will always be key in ensuring your company’s survival: customer service. To do this, you must prioritize your Shopify support tactics, and invest in your customer experience. The best way to ensure that your customers come back, stay loyal, and spread the word about your brand is to make them feel cared for by giving them personal attention, especially when things don’t go as planned or they’re confused about what they’re buying.
Here at Growth Spark, we pride ourselves on building great customer experiences through design, but we know that a beautiful website must support a great customer experience for best results. To help out, we’ve put together a series on exactly how to make your customers feel loved. This is the third and last article in the series, and will teach you the pros and cons of using fraud prevention software, and our favorite picks in this category. If you missed it, check out the first article in the series, Best Practices For Shopify Ecommerce Customer Service, where we covered all the basics for getting start with great Shopify support, and the second article, How Great Customer Service Can Save Your Shopify Store During Setbacks, which recommended tactics and tools you can use to make the best of any bad situation by using it as an opportunity to strengthen your customer relationships and brand trust.
Be Prudent, Not Paranoid
When you’re initially setting up your Shopify support system, you’re focusing on the customer experience, which is a great way to get started. Before you mark your company’s customer service toolkit as completed, however, make sure you also invest in protecting your own company’s interests, both against accidents and malicious attacks. As a Shopify store owner, this will mainly mean deciding on a fraud prevention tool and set of protocols. While designing your security, however, make sure to be mindful of the Goldilocks Zone for security. You want to be alerted to potential criminals, and have some preventative action automated, but going overboard will drive away real customers.
Understand What You’re Preventing
Before you pick out a fraud prevention software, it’s a good idea to make yourself familiar with the different kinds of fraud that you’re most likely to encounter, and how to fight each of them. According to a recent Shopify blog, the most common types that entrepreneurs should be aware of are:
- Discount Abuse - When employees abuse any discounts you may offer them as part of the company, usually by applying it to other customers’ purchases.
- Sweethearting - If you have employees that help customers check out their orders as part of your Shopify support plan, they may write in discounts to “sweetheart,” or familiar, customers.
- When a customer returns an item to your store that they acquired elsewhere, often illegally.
- If your products are assembled or delivered by a third party, you may need to take steps to prevent their employees from committing theft.
- By far the easiest fraud for a customer to commit, especially if they’re careful about how frequently they do it at each store. Wardrobing is exactly what it sounds like - the customer purchases an item, uses it once (such as an expensive clothing item for an event), and then returns it.
Ad Spend Fraud
- When you spend money to publish online advertisements, the result you hope for is a lot of click-throughs. However, if you operate in a highly competitive market (especially if you’re a major brand), your competitors may invest in software that clicks on your ads to make you pay more for marketing that isn’t being seen by humans. This is especially true during the holidays - White Ops predicted that up to $3.5 billion will likely be lost to ad fraud during Q4 2017 alone.
Consider your products, the number of employees and vendors you have, and what type of fraud would be most likely to occur. You’ll start your hunt for the perfect software solution on the right path if you know your key end goals on the outset.
Blacklists Can Be Tempting, But They Can Also Backfire
When a fraud prevention tool advertises that it uses a blacklist, it means that it stores a lists of customers (and their financial information) who have been deemed risky, and blocks them from making further purchases. “Risky” usually means that they have triggered a chargeback, their financial information was found to be stolen or invalid, or they are located in a geographical location that the company considers too high-risk to want to sell to. According to the Merchant Risk Council, 96% of 466 surveyed merchants reported using an internal blacklist to manage online fraud, and they can be extremely effective. So what’s the problem?
The frustrating truth is that a significant amount of the time, chargebacks are caused by legitimate orders and are declined through some error on the merchant’s part. Additionally, often times, even when a purchase is fraudulent, blacklists often record data that is tied to other, unrelated and legitimate customers - such as the address of a large apartment complex or corporate office.
In addition to these existing difficulties making blacklisting less than effective is the fact that more often than not, fraudulent purchases are made with stolen information, and that information was never intended to be used again anyways. Thus, adding that information to your blacklist only blocks a theft victim from purchasing from your store in the future, not the criminal.
That said, if you’re struggling with a significant fraud issue, blacklisting may be a good way to cut down on your loss. If you’re just starting out, or if you’re established but haven’t struggled with rampant fraud, be careful about implementing this type of tool.
Above All Else, Use Common Sense
It’s easy to get worked up over fraud prevention and security issues when building up your Shopify support system (we’ve been there, we understand). However, the best advice we ever received was to just use common sense - and we pass that wisdom on to you and all of our customers.
While you’re deciding on your software choice, know that you can check on potential fraud manually through Shopify’s built in fraud analysis tool that uses machine learning algorithms. It’s a major perk of the Shopify ecosystem, as you’re already protected from day one, unlike a self-hosted ecommerce store - so you can take more time in picking out your extra defenses.
You can also bolster the built in capabilities with FraudFilter, a free tool that expands your control over Shopify’s default fraud detection services.
Now that you know you have time to breath and make reasonable choices, a few pieces of good ol’ common sense advice:
- Don’t blacklist or whitelist entire countries - if it was really that simple, the world would be crime free. Instead, base your limits on proven trends related to shipping settings or other measurable behaviors.
- Review your fraud prevention strategies frequently (ideally at least once a year). Take time to go through them every time your company has a major “life achievement,” such as a major growth period, market expansion, acquisition or investment.
- Keep your software up to date, as many vendors include some fraud and theft prevention tools of their own, especially if they handle transactions for you.
- Track return trends. If you notice that a certain type of customer is behaving poorly, it’s alright to keep a closer watch on them or even block them. Watching what gets returned will also tip you off to what products are most likely to be the target of fraud.
My final piece of advice is just to take it one step at a time. There’s no one answer when it comes to fraud prevention and security, and with each additional precaution comes a restriction on the type of customer you can accept.
Growth Spark Recommends: NoFraud
We’re in the business of designing beautiful websites, but we also tend to stay in contact with our customers long term, as we help to maintain the websites we produce long term. This often means that we form a friendship with many founders who come to us, and we learn about how they run their business.
One name that we’ve heard again and again when talking about security is NoFraud, an app built for ecommerce specifically. The first two weeks are free to try out, though you’ll need to contact their Shopify support team to get a custom quote if you’d like to purchase a plan.
While Shopify’s Fraud Filter is well built, adding on protection like NoFraud will serve you well in preventing profit loss and other financial risks by including:
- Chargeback Protection - NoFraud’s promise that if you get a fraud chargeback on an order their system passed, they’ll reimburse the amount lost.
- Cardholder Verification - This system helps NoFraud accept orders that other, simpler algorithms may reject by parsing through all of the data to more accurately determine if the buyer is legitimate.
- Automation - Shopify’s built in capabilities work well for smaller businesses, but one of the main drawbacks is that you’ll need to manually review orders that are flagged, which could eat up a lot of your time. NoFraud automates almost all of your security, which allows you to go back to running - and growing - your business.
Stay Safe, Stay Sane
Investing in fraud prevention is an important part of building out your customer service toolkit, and it’s critical to keeping your company growing and profitable. While every store’s needs are different, there is no type of business that is totally safe from crimes, so don’t skimp on protection. Keeping your profit margins safe will keep your business healthy, and you and your team sane for years to come.