What the success of Pokémon Go teaches us about fraud
ClearSale’s team of fraud experts is here to shed some light on how Pokémon Go can teach us a thing or two regarding fraud management for e-commerce merchants.
1. Prepare for trouble, make it double
The game reached nearly 23 million active users in a single day and went on to gain an additional 6 million downloads per day all within its first week on the market. Even with all the preparation it took, Niantic`s servers couldn’t handle all this activity in the first week. Many users complained about being unable to play due to the server’s instability.
Isn’t this similar to what we experience during Black Friday? You can plan all you want, but what we’ve seen every year is that sales seem to always surpass expectations. Is your system equipped to handle all that activity without crashing? How will your fraud screening process work? These are important questions that a merchant should have in mind prior to Black Friday unless you want to risk losing sales (or risk becoming a viral internet meme that mocks your inability to please consumers!).
2. Cheating Happens!
The game’s concept gives players incentive to leave their house and go for a walk in order to find and capture new species of Pokémon. But then, of course, there are the cheaters who see no point in walking around if they can make the game’s GPS believe they’re in Central Park when they’re actually sitting at their computer in Idaho. Niantic responded by banning people that “teleport” in the game. By “teleport” they mean that a user would appear to be in Mexico, for example, and then suddenly they would appear to be in Manhattan; this is an obvious indicator that the user is cheating.
But it’s never that easy to rid yourself of cheaters. All the cheaters had to do was make their GPS believe that they were actually walking by using tools like joysticks to crush users who actually play the game on foot. Not exactly a level playing field, is it? It is to be expected, though, as the same level of sophistication applies to fraudsters who change their strategies once they realize that merchants have discovered their latest methods of fraud.
Fraudsters and cheaters both result in loss. Niantic recently vowed to do whatever it takes to rid Pokémon Go of cheaters. In a similar vein, as a merchant you must do whatever it takes to combat fraud or else it will certainly negatively impact sales.
3. Have faith in the majority
Creating rules to combat fraud is never easy, but there are a lot of things the merchant must have in mind prior to implementing new rules. Niantic made the mistake of banning the entire country of Belgium from playing Pokémon Go in an attempt to stop a group of cheaters. This was obviously a mistake on their part. Keep in mind that the majority of players are well-meaning players and you shouldn’t allow a small group of cheaters to negatively affect the way you treat the good guys.
< often take similar measures to prevent fraud, deciding to never ship to a certain country due to suspected risk. Merchants often neglect Brazil, for example, but ClearSale’s fraud prevention efforts allow merchants to approve approximately 98% of Brazilian e-commerce transactions. It’s difficult to determine the losses that come as a result of banning such large groups of potential customers, but they are certainly high.
< believes that the majority is good, and that you should never hurt good customers.
4. Customers will talk, and fraudsters will talk faster; embrace it
Players, like customers, communicate among themselves. In the first of week of Pokémon Go, websites began popping up to inform players of the best locations to spot their favorite Pokémon. The tendency of consumers to talk to each other about products can be viewed as a positive or a negative. A good customer will tell all their friends about how satisfied they are with a product, but a dissatisfied customer will do the same thing and the negative effect that can have on sales is notable. You should also note that fraudsters also love to communicate—there are hundreds of forums that fraudsters leverage to find out which websites are most susceptible to fraud. Don’t let fraudsters view your company as an easy one to hack!
The best way for an e-commerce merchant to combat fraud is to work with an outsourced fraud management company who specializes in issues such as these.
ClearSale aims to allow you the chance to focus on driving sales and engaging with customers while we handle all of your fraud management needs.