Transactis

For too many UK home shopping firms, tackling false Goods Lost in Transit (GLIT) claims remains a double edged sword – be too accepting of the customer’s word and fraudulent claims slip through the net; be too aggressive and honest customers with legitimate complaints feel treated like criminals and take their business elsewhere.

But it is a growing problem and firms have to find a way to deal with the issue. Sure the apocryphal GLIT tales doing the rounds are amusing and make point anecdotally that some consumers can be, well, tricky customers: the woman who answered her front door to the claims investigator wearing the ring she reported as ‘undelivered’, the man who invited the investigator into his living room where his ‘missing’ TV took pride of place, the merchant that opened a ‘returned’ flat screen TV only to find an old car door inside the box instead. But home shopping retailers can’t rely on such instances of happenstance to catch the professional fraudsters – not to mention the more amateur chancers – out there.

The worrying fact is that false GLIT claims remain a low priority for most home shopping merchants in the United Kingdom, despite online fraud in the UK being more than double that of the US and Canada, according to a new study by CyberSource, a Visa company. Moreover, the study suggests only 30% of online retailers in the UK see improving automated fraud detection as a key concern, compared to 53% of those from North America.

What is vital to filtering out GLIT fraud and ensuring that legitimate claims are dealt with as promptly and efficiently as possible, and needs to be seen as essential by more retailers, is having the necessary consumer data to hand to allow home shopping companies to take an informed and appropriate approach to each consumer on a case-by-case basis – that is, give frontline claims management staff information that enables them to identify which claims are potential cases of fraud and which are likely genuine instances of goods gone missing.

This approach is most effective if a retailer implements a system that enables it to screen claimants for potential risk and fraudulent activity at the first point of contact, where costs are still relatively low. This system would require that frontline claims management staff have access to full up-to-date information on the customer and the delivery destination.  Having a clear view of every customer’s transactional and fulfilment history – including that person’s record with other retailers if possible – and similar information tied to each delivery address would give company’s contact agents the tools to identify patterns of behaviour and previous problems that might indicate whether fraud appears to be a risk or whether a claim is likely to be legitimate.

Nonetheless, customers whose goods really have gone missing will already be in a state of annoyance and scrutinising them with invasive security measures risks not only irritating them further, but also driving them away. The screening system thus needs to alert staff as to how likely the call is to be true or false. One way in which this may be achieved is by using critical data to identify GLIT hotspots and suspicious customer profiles, ensuring additional, probing questions are targeted towards the most suspect claimants. Often, a little directed questioning can result in a fraudster dropping their claim without needing to progress to the stage where investigators are brought in to follow up in person.

When supported by robust data, a gently challenging style coupled with some conversation management can deter fraudsters without putting off genuine customers. In addition, once a comprehensive system is in place, it becomes possible to analyse trends which go beyond the risk address or fraudulent claimant, potentially allowing the management of GLIT fraud before it even happens – for instance, making a signature a requirement when an order is placed to a suspect address. The data might also show that certain products need extra attention at specific times – for instance, certain products might be targeted by false GLIT claimants on say the day and first month of the release of a hot computer game or DVD box set.

While most firms on their own don’t have the access and capability to tap the data they need for this type of screening system, Transactis does. Working with a third-party data insight and management expert such as Transactis can help retailers measure the costs they are sustaining through GLIT fraud and act to reduce those without disrupting operations. Better access to, pooling of, and understanding of available data is imperative if retailers are to tackle this type of fraud before it becomes uncontrollable.