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ClearSale’s Unique Approach to Fraud Analytics and Manual Reviews


ClearSale’s Unique Approach to Fraud Analytics and Manual Reviews

Over the past 16 years, the problems of fraud, false declines and chargebacks have remained constant, but fraudsters’ approaches and e-commerce itself are always evolving. To combat this, ClearSale has continually innovated. The result is a unique approach to analyzing and reviewing fraud that is unequaled in the market.

Ultimately, everything about ClearSale’s approach is designed around one overarching goal: To make better decisions about fraud. Making better decisions about fraud means doing three things exceptionally well:

  1. Approve more good orders.
  2. Stop more fraud.
  3. Make decisions faster.

Succeeding with these three elements creates a better experience for the consumer and a better profit margin for merchants.

So how does ClearSale do this? By developing a hybrid approach that automates some decisions and forces manual reviews of other decisions. This requires leveraging the right mix of technology, analytics, and people.

Here’s a closer look into the two core teams that put this unique hybrid approach into motion.

The Business Analytics Team

To make accurate, fast fraud decisions, ClearSale has developed a proprietary statistical algorithm that quickly analyzes an enormous range of factors surrounding every incoming order to assign a fraud score for each order.

This automated analysis sits at the center of our fraud prevention strategy, so it’s absolutely critical to get this process right – and that’s exactly what the Business Analytics Team is tasked with.

This team is staffed by a cadre of 50+ data scientists, statisticians, mathematicians, and information architecture specialists who have built careers around understanding business problems and developing analytical solutions. These experts are responsible for creating, updating and managing ClearSale’s process for calculating fraud scores on every incoming order.

Customizing Fraud Scores

Notably, this team is also able to customize this analytic process for any ClearSale customer. When a business has a unique fraud risk profile, off-the-shelf fraud scores can create problems. The Business Analytics Team is able to capture the business requirements of any customer and develop a customized fraud score specific to that business.

Continual Optimization of Fraud Algorithms

The Business Analytics Team also closely monitors evolving fraud patterns across industries and markets. As fraudsters pick up new tricks, the Business Analytics Team is able to spot these emerging fraud methods and input this new information into the ClearSale statistical model. This also means occasionally dropping old rules that no longer make sense in the current fraud landscape.

The result is an always accurate, always up-to-date, always optimized automated method to analyze every incoming order and assess the order’s total fraud risk. Every legitimate order is correctly identified as not fraudulent and approved immediately. And every order that is potentially fraudulent is quickly flagged for further analysis by the Manual Review Team.

The Manual Review Team

Because the Manual Review Team must be able to make fast, accurate decisions, ClearSale has developed a unique approach to building this team. And with one supervisor per 20 reviewers — a low ratio that’s almost unheard of in the industry — there’s always someone nearby to offer guidance.

Every ClearSale reviewer starts with an intensive training program where they spend two weeks simply evaluating transactions without ever making an actual decision. That’s followed by up to three weeks of making decisions under the watchful eyes of multiple supervisors. When analysts are finally allowed to begin decision making on their own, they are initially given only the least risky orders and must follow a strict evaluation procedure. Eventually, as the analysts gain more experience, they’re gradually given the flexibility and authority to move outside of the strict guidelines and can begin following their own intuition about the likelihood of fraud on incoming orders.

Matching Analysts to Clients

ClearSale takes a thoughtful approach when it comes to assigning orders for review. Because each analyst comes with their own experiences, ClearSale takes the opportunity to organize its review queue by fraud analyst, matching store profiles with analyst capabilities. High-dollar orders might go to a veteran reviewer, while an analyst with extensive expertise with Mexico will be assigned orders with shipping addresses in Mexico.

Double Validation

To further minimize mistakes, ClearSale has put a double-validation process in place with the Manual Review Team. If an analyst believes an order is fraudulent, a second analyst will be called in to review the transaction and validate the finding. If the two analysts have differing conclusions (i.e., one says approve while the other says decline), a third analyst is brought in to make case-by-case decisions and break the tie.

Batch Order Reviews

Another innovative way ClearSale helps ensure accurate decisions is by allowing analysts to look at a list of orders at once, rather than individual orders in isolation. This group analysis approach enables reviewers to identify common risk factors, such as IP addresses or delivery locations, that wouldn’t be noticed if orders were reviewed one at a time.

This batch analysis also lets ClearSale reviewers compare questionable orders with orders placed recently with other merchants. This ensures reviewers can spot fraud patterns more quickly and therefore make more accurate decisions across multiple clients at once.

Proprietary Reporting Database

ClearSale has built a proprietary database and reporting system that enables Manual Review Team supervisors to quickly run transaction reports and provide analysts near-real-time feedback on their performance. These reports also help merchants themselves forecast the peaks and valleys of their business — insight that’s especially critical when the holiday season draws close and merchants are looking to predict how to staff and stock for the season.

A Combination of Factors That Sets ClearSale Apart

As a company dedicated to innovation, ClearSale differentiates itself based on the quality of its fraud decisions. Through a unique combination of technology, analytics and people, ClearSale can offer customized fraud solutions to each of its customers. These customers understand that each business is unique and that fraud variables can vary widely among verticals: The fraud risk of a $1,000 order of fine jewelry isn’t the same as a $1,000 order of auto parts.

Not only does this customized approach to fraud result in fewer chargebacks and false declines, it also offers consumers a better purchasing experience. For ClearSale, this customer-centered approach is more than a smart way of doing business; it’s rooted in the company’s DNA.

Ready to learn how this customized approach can work for you, too? Contact a ClearSale analyst today to learn more.

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