The fashion industry was once considered to be exclusive, centered around elite department stores and seasonal trends. However, thanks to innovation in technology, e-commerce, and the rise of fast fashion, retailers can now offer accessible apparel on-demand, and everyday consumers now expect seamless shopping experiences at their fingertips. New capabilities like clothing rental subscriptions, online loyalty programs, and mobile payment options are all driving consumers to spend more while simultaneously changing their relationship with their favorite brands and retailers. In 2018 alone, American shoppers spent an estimated $102 billion online on apparel, footwear and accessories.
A BOGO for Fraudsters
Increased accessibility for consumers can also mean increased opportunities for fraudsters. The apparel and accessories industry is consistently a popular target for fraudsters due to the high ROI they can achieve with these attacks. In fact, Forter’s Sixth Fraud Attack Index reported an increase of 47% in fraud attack rates against the apparel and accessories sector.
How are fraudsters slipping through the cracks? Merchants can’t always tell the good guys from the bad ones. Since good customers often buy apparel for groups or teams, or purchase items in more than one color or material, fraudsters buying in bulk can mimic these behaviors and fly under the radar of merchant systems without raising any red flags. These behaviors, combined with the ease with which fraudsters can resell apparel on third party sites, makes the industry extremely appealing for criminals.
A Pricey Predicament
Retailers are currently facing a one-two punch. On the one hand, they must protect their customers against these increasing fraud attack rates. However, with the rise of “fashion on-demand” models where consumers expect their products to arrive within a matter of days, merchants cannot afford to cause delays in the fulfillment process with manual fraud prevention measures, at risk of losing lifetime value (LTV) from dissatisfied customers.
Fraud is Out of Fashion with Forter
Rainbow, an international retailer offering an array of affordable fashion, knew that a legacy or rules-based approach to fraud would not be able to stop today’s sophisticated fraudsters while maintaining the accuracy and efficiency they needed to keep their customers happy. They chose Forter’s Payment Fraud Protection solution to fully automate their risk operations and protect their customers at all stages of the buying journey. Through this approach, Rainbow has experienced a 99.3% approval rate, with a 56% YoY chargeback rate reduction. Not only has Forter’s solution helped Rainbow generate more revenue with increased approvals, but Forter’s sophisticated machine learning model has also enabled Rainbow’s risk teams to better understand their fraud ecosystem. Now, they can spend less time worrying about catching fraudsters and more time addressing unique pain points and adding value to their business.
As Rainbow’s Director of E-Commerce and Customer Service Michael Hoffman explains, “by leveraging AI and machine learning, Forter provides us an expert eye for the details of many forms of fraud, with full automation and higher accuracy.”
In partnership with Forter, Rainbow can continue to focus on delivering vibrant fashion choices at an affordable cost, without the risk of fraudsters trying to rain on their parade.
For more information on Forter’s partnership with Rainbow, read the full case study here.