Fraud Prevention Without Compromising Customer Experience
Growing the ecommerce store brought more orders but also exposed Level5 to new risks. The company had basic ecommerce fraud-prevention tools to identify potentially risky orders, but these tools left its customer service team to decide whether those orders should be approved or declined.
Fraud analysis wasn't the team's area of expertise, though, so every manual review introduced the possibility of either approving a fraudulent order or declining a legitimate one.
The process was also taking time away from customers. Employees who were reviewing orders couldn't spend that time answering questions or finding other ways to improve the customer experience, hurting the overall business in the process.
There was a financial impact to this lack of fraud-prevention expertise, too, as Level5's chargeback rate reached 2.1%, more than twice the 1% threshold associated with higher processing rates. The team was also only approving about 90% of orders on average, so some legitimate purchases were likely being turned away.
Level5 needed a better way to protect its business from fraud without putting more pressure on its customer service team or creating new problems for legitimate customers. The company began looking for a third-party fraud prevention solution that could integrate with its BigCommerce store and deliver fast, accurate order decisions.
Chargebacks Cost More Than the Original Transaction
A 2.1% chargeback rate is really high, and the financial impact of chargebacks goes well beyond the value of the original transaction.
For instance, Mastercard reports that each chargeback costs merchants an average of $82 in internal expenses and $46 in third-party fees for a total of $128 per chargeback. Those figures don't include the cost of lost goods or services either.
In short, Level5's 2.1% chargeback rate exposed the company to unnecessary financial risk, while customer service employees were spending valuable time reviewing orders and assessing potential fraud.
ClearSale Complete Decision with Chargeback Guarantee
Level5 went with ClearSale Complete Decision with Chargeback Guarantee to take its fraud prevention and order review process beyond the basic ecommerce screening the company had in place. This solution combines AI-backed fraud detection with expert secondary analysis to help distinguish legitimate customers from potentially fraudulent transactions.
Instead of relying on its customer service team to investigate suspicious orders, Level5 could turn those decisions over to a fraud-prevention partner with specialized expertise. That meant employees could spend less time reviewing orders while legitimate customers could receive faster, more accurate decisions.
Overall, the Chargeback Guarantee gave Level5:
- Protection from eligible fraud-related chargeback costs
- Less financial burden and administrative hassle associated with those disputes
- Integration with Level5's existing BigCommerce ecommerce operation
- Fraud prevention backed by more than two decades of experience with global ecommerce brands
- AI-backed tools that learn the behavior of Level5’s customers to avoid false declines that could drive customers away for good
Together, these capabilities gave the company a more efficient way to protect orders and approve legitimate purchases from its loyal customers.
Higher Approval Rates, Fewer Chargebacks, More Time for Customers
ClearSale delivered measurable improvements to Level5's fraud prevention and customer experience operations.
Within the first eight months, the company safely approved close to 99% of orders each month, compared with its previous average of approximately 90%. That represents a 9.8% increase in its average monthly approval rate, helping Level5 serve more legitimate customers without sacrificing fraud protection.
This improvement even held up during Level5's annual March promotion, when order volume more than doubled compared with the rest of the year. Previously, the customer service team had to perform manual ID checks during the sales surge, but with ClearSale handling fraud screening and order reviews, that manual workload was significantly reduced.
ClearSale also reduced Level5's average chargeback rate by 90%, bringing it down from 2.1% to just 0.21%. ClearSale Complete Decision with Chargeback Guarantee meant Level5 was not responsible for fraud-related chargeback costs either, giving the company greater financial protection while reducing the administrative burden associated with disputes.
See how ClearSale Complete Decision with Chargeback Guarantee can help protect your ecommerce business from fraud and chargebacks.
