CASE STUDY
Urban Outfitters Receives Immediate Cost Savings with
Accertify Despite Having Industry-Leading Low Chargeback Rate
Retailer Reports Interceptas Dramatically Reduced Fraud-Related Labor Costs
and Fulfillment Delays While Driving Chargeback Rate Even Lower.
Company Profile
Urban Outfitters, Inc. is a lifestyle specialty retail company operating under the Anthropologie,
Free People, Terrain, Leifsdottir and Urban Outfitters brands. Our established ability to
understand our customers and connect with them on an emotional level is the reason
for our success.
Our brands — Urban Outfitters, Anthropologie, Free People, Leifsdottir and Terrain — are
both compelling and distinct. Each brand chooses a particular customer segment, and once
chosen, sets out to create sustainable points of distinction with that segment. In the retail
brands we design innovative stores that resonate with the target audience; offer an eclectic
mix of merchandise in which hard and soft goods are cross merchandised; and construct
unique product displays that incorporate found objects into creative selling vignettes. The
emphasis is on creativity. Our goal is to offer a product assortment and an environment so
compelling and distinctive that the customer feels an empathetic connection to the brand
and is persuaded to buy.
“Accertify exceeded our
expectations and dramatically
improved our customer service.
Orders are processed faster with
a minimum of delays. Interceptas
has absolutely driven savings
to our bottom line.”
Bryan Whitney
Contact Center Director
Urban Outfitters Inc.
“Our fraud team loves
Interceptas. Usability is excellent
and the tool has improved their
ability to do their jobs.”
The Challenge
Card-not-present fraud is a significant factor that erodes e-commerce merchants’ profitability.
While managing chargebacks is a key objective for many merchants, they are faced with the
dilemma of how to control losses without also increasing the operational costs of managing
fraud or negatively impacting the customer experience. By aggressively screening orders,
Urban Outfitters’ three retail brands had achieved a very low, average chargeback rate of less
than 1/10th of 1 percent of sales, significantly lower than the industry average of 1.4 percent.
While stricter controls enabled the retailer to stop more fraud, they also caused delays in
processing orders from customers whose purchasing habits made their orders appear
suspicious. These orders were put on hold until the company’s fraud analysts could manually
review them and verify that they were not fraudulent.
The review process was labor-intensive and time-consuming, resulting in fulfillment delays
that caused customers to call the UrbanOutfitters’ Contact Center seeking updates on their
shipments. Manual reviews also required increased staffing to meet growing order volumes.
Urban Outfitters was also seeking a platform that would empower its fraud prevention team
to take control of its fraud fighting efforts. The retailer did not want to become dependent on
its fraud prevention solution provider or internal IT department to update screening rules or
add new tools. The goals needed to be met while maintaining or improving the company’s low
chargeback rate.
ACCERTIFY® CASE STUDY
Urban Outfitters
Founded in 1970, Urban Outfitters
operates 148 stores in the United
States, Canada and Europe, all offering
an eclectic mix of merchandise. We
stock our stores with what we love,
calling on our — and our customer’s —
interest in contemporary art, music
and fashion. From men’s & women’s
apparel and accessories to items for
the apartment, we offer a lifestylespecific shopping experience for the
educated, urban-minded individual
in the 18 to 30 year-old range — both
online and in our stores as well as
through our catalog.
Anthropologie
Founded in 1992, Anthropologie
operates 127 retail stores in the
United States and ships to over 30
countries via our direct business.
Catering to the fashionable, educated
and creative woman of 30 to 45, we
provide a unique product assortment
that includes casual apparel and
accessories, home furnishings and a
diverse array of gifts and decorative
items. Carefully designed and selected
with an eye for craftsmanship and
detail, our merchandise is offered
in an inimitable environment, both
online and in our stores.
Free People
Founded in 1984, the Free People
retail and wholesale presence
encompasses 33 stores in the
United States and three wholesale
showrooms whose teams have
cultivated relationships with over
1,400 specialty boutiques and
department stores across the globe.
In addition, we produce a directto-consumer catalog and website,
providing an inspiring shopping
experience for the carefree, confident
and curious young woman who
appreciates our distinctive assortment
of apparel, accessories and
housewares.
The Solution
After evaluating various solutions available in the marketplace, Urban Outfitters chose
Accertify’s Interceptas because of its ease of use, flexibility and complete array of
fraud-fighting features and functionality.
Interceptas was fully implemented in April 2009. Through Interceptas, Urban Outfitters gained
access to a sophisticated order screening system integrated with a unique workflow platform
that streamlined the entire fraud prevention process; guiding the prioritization, queuing, review
and resolution processes and applying consistent analysis throughout. Following an in-depth
analysis of its chargeback data, Accertify increased the number of data points used in screening
orders and deployed more than 200 new rules in the screening process. Accertify’s fraud
experts worked closely with Urban Outfitters during implementation to develop new screening
rules tailored to the company’s unique business challenges and to subsequently adjust them
for maximum effectiveness.
Accertify’s Interceptas platform has also enabled Urban Outfitters to make better use of
its negative and positive files in an automated fashion. It has allowed Urban Outfitters to
update and manage these files much more effectively. In turn, the volume of false positives
that previously caused legitimate orders to be delayed and queued for manual review to be
significantly reduced. Legitimate orders flow through Interceptas and are no longer susceptible
to review and rejection by a manual review agent.
“We have more data points to drill down on without having to contact customers
so inbound and outbound calls are reduced.”
Interceptas is designed to keep fraud analysts focused on high-risk orders while enabling them
to review orders quickly. Urban Outfitters was able to easily customize the platform’s user
interface to meet their unique business needs. Because it displays all transaction information
on a single screen, Interceptas gives the retailer’s analysts more information at a glance and
eliminates the need to review multiple systems or resources to complete the decision process.
It allows for faster decision-making by consolidated, point-and-click access to all relevant data
and multiple fraud-fighting applications and tools.
“We made the right choice with Accertify. They are the experts in their field and I
recommend Interceptas to any merchant that wants to lower their cost of fraud
prevention and enhance their customers’ experience.”
The flexible data management capabilities in Interceptas have cut out hours of work in report
preparation. New chargebacks are entered into the closed-loop system in real-time so fraud
screening controls can be quickly adjusted based on changing fraud trends. Negative files
are automatically updated and linked orders can be identified. Fraud prevention managers
no longer have to be concerned about researching new fraud-fighting tools. Accertify
delivers regular updates, feature enhancements and integrated access to new services and
technologies.
“We are meeting our ship time commitments more consistently because of the
large drop in the number of orders delayed for verifications. The labor savings
and improved customer experience is significant.”
ACCERTIFY® CASE STUDY
“Interceptas provided significant
improvements in efficiency and
productivity while improving our
chargeback rate.”
2009 Manual Review Rate
34%
The Results
The positive impact of a streamlined, more cost-efficient fraud prevention process was experienced
immediately after deployment. The following outcomes were achieved by Urban Outfitters after
five months of using Interceptas:
•
A dramatic reduction in manual reviews and order delays. The volume of orders delayed
for review fell by an average of 83 percent for Urban Outfitters brands, Anthropologie, Urban
Outfitters and Free People; the average manual review rate dropped from 34 percent to 6
percent.
•
A significant reduction in shipping delays and customer inquiries. Urban Outfitters handled
44 percent fewer inbound calls from customers related to order processing and verification.
The company experienced a 67 percent reduction in customer call-backs on orders held for
review. Outbound calls related to order verification fell 61 percent.
•
A substantial reduction in operational costs and staffing requirements. Efficiency
gains in order processing enabled Urban Outfitters to lower fulfillment costs and reduce
fraud prevention staffing to 7 from 17 full-time employees, a 59 percent reduction. Ten
83% drop
32%
fraud prevention employees were reassigned to open positions in other customer service
departments in order to meet the needs of their growing order volume.
•
10%
8.4%
3.9%
March
April
May
June
Before Interceptas
July
5.8%
August
A continued drop in chargeback losses. Urban Outfitters’ already low, average chargeback
rate (as a percentage of credit card sales) has declined by as much as 66 percent on a
monthly basis. Fraud losses on average have declined 63 percent, while the dollar volume of
fraud-related order rejections has increased by 23 percent, indicating that Urban Outfitters
is successfully finding and stopping more fraud before it happens. For the month of August
2009, Anthropologie reported zero chargebacks, an unprecedented achievement.
After Interceptas
Total Inbound Verification Calls
6173
Fraud Prevention FTEs
4962
17
Chargeback Rate % Charge Sales
4552
44% drop
3602
59% drop
2931
16
63% drop
3427
-
10
March
April
May
Before Interceptas
8
June
7
7
July
August
After Interceptas
.054%
.07%
.07%
.092%
.036%
March
April
May
Before Interceptas
June
July
August
After Interceptas
March
April
May
Before Interceptas
June
July
August
After Interceptas
Accertify, Inc., a wholly owned subsidiary of American Express, is a leading provider of fraud prevention, chargeback management, and payment gateway solutions to merchant customers spanning diverse
industries worldwide. Accertify’s suite of products and services help e-commerce companies grow their business by driving down the total cost of fraud, simplifying business processes, and ultimately increasing
revenue. To complement these solutions, Accertify also offers its customers a best-in-breed portfolio of support, professional, and managed services that empower companies to focus on growing their
business, rather than on the underlying technology of their e-commerce systems. To learn more, visit www.accertify.com.
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