Published: March 29, 2022
Reading time: 4 minute read
Written by: Forter Team

“With Forter, we’ve seen year-over-year improvements with our chargeback performance to the tune of about 10 percent,” says Jim Gallagher, Nordstrom’s Vice President of Customer CARE & Fraud. “Every single year, our chargeback performance positively is improving by about 10% percent. And that’s with significant volume growth in the eCommerce space.” 

Gallagher and Scott Buchanan, CMO at Forter, teamed up for a recent webinar on how Nordstrom approaches “Striking the Right Balance Between Delighting Customers and Stopping Fraudsters” — and how collaboration with Forter helps Nordstrom drive more revenue, improve customer experiences, and reduce losses to fraud. The discussion was hosted by Chad McDaniel, Chief Community Leader of the executive customer advocacy group Execs In The Know.

Nordstrom is known for its fine apparel and accessories and its best-in-class customer service. While Nordstrom offers free shipping and return policies, promotions, and mobile shopping experiences that continue to retain and gain new happy customers, these offerings are also becoming a bigger target for fraud and abuse.

Forter helps Nordstrom to make accurate, instant decisions about every interaction along the digital commerce funnel— such that Nordstrom has enjoyed 10 consecutive quarters of smashing their yearly objectives and priorities.

Buchanan kicked off the conversation by citing a recent study that found that 69% of business leaders believe that their organizations overemphasized fraud prevention at the expense of customer experience. In 2021, global fraud losses totaled about $27 billion, while the cost of falsely declining legitimate customer transactions was $443 billion, 16 times the magnitude. 

So, how is Nordstrom approaching this current climate, and what tools has Forter provided to augment their expertise? 


Making identity-based decisions

Policies are typically created with the goal of catching bad actors and preventing abuse, but rarely do merchants think about creating policies that enable more loyalty, more spending, and more engagement with a brand for good customers. 

Key to this engagement are:

  • Distinguishing between good customers and fraudsters.
  • Understanding the persona: from the devices the customers are using and their patterns of behavior, to the complexity and makeup of their cart, to the language of their OS and device fingerprinting. 
  • Looking at the end-to-end customer journey holistically: from account creation, to log in, to log out, and to all the different touchpoints the customer has in between
  • Automating the process of making decisions on the persona, not just on the transaction.

Gallagher observes how with retail, if you can’t close the sale quickly, a customer is going to go someplace else. Introducing friction for good customers through misguided fraud prevention is something all merchants want to avoid. Nordstrom partnered with Forter early on to help improve in making real-time, identity-based decisions on whether or not an incident is a fraudulent transaction and would result in a chargeback. This ability to automate identity-based decisions helped Nordstrom to usher significant differentiated results including: 

  • Improved chargeback rate
  • Increased approval rate
  • Reduced Insult rate


Leveraging a global network

A network of real-time learning makes it possible to work together to reduce fraud on a global basis. Forter shepherds a community that fights fraud as a coalition: a fraudster recognizable to one merchant is known to all merchants.

Gallagher observes how fraud is not a one-person game: “We’re never going to win as individuals in this space,” he sats, “It has to be an area that we come together and share best practices, learn from one another, test, and try to stay ahead of the bad guys.”


Embracing automation

Buchanan explains how automation is fundamental to Forter’s foundations: “The company was created years ago on the basis that 100% automation was the way to make decisions with respect to the digital commerce funnel. 99% of the decisions that we issue arrive in fractions of a second, and that’s critical to brands like Nordstrom being able to deliver for customers on a consistent basis.”

Through its automation, Forter helped Nordstrom to remove dependency on reactive rules and manual reviews, resulting in a 10% improvement in chargeback performance each year.

Automation also enables the introduction of more value-add services. With automation, merchants can offer their customers:

  • Buy online, pickup in-store
  • Buy online, return in-store
  • Mobile app orders
  • Phone orders
  • Omni-channel experiences

Simplifying management and insight

The more a merchant can move away from labor-intensive manual reviews and into an automated system, the more easily they can flip their organization to think proactively about potential chargeback or fraud vectors, and about trends. By approaching fraud within the framework of customer experience, Forter’s global network supports merchants such as Nordstrom with:

  • Sharing the dialogue and ownership of the problem
  • Unifying accounts and bringing businesses together 
  • Stopping fraud from getting siloed and elevating the conversation across the organization
  • Representing fraud and chargebacks in one holistic picture: aligning physical in-store fraud with eCommerce fraud

“Forter knows more online identities than Amazon and PayPal and Shopify,” says Buchanan, “and we can use that to help strike that balance between giving customers a great experience, approving more transactions and growing revenue, but then making fraudsters miserable and making their lives difficult. And ultimately those are the kinds of business outcomes that we care about driving for our merchant customers.”

Watch the complete 60 minute webinar

4 minute read