Online sports retailer Ambush Board Co.’s search for a new fraud prevention vendor started as many such quests do: The current provider just wasn’t cutting it.

Ambush Board had 2015 web sales of about $7 million, but it also racked up approximately $40,000 in chargebacks in the 12 months before it changed fraud prevention service providers in April, says Eric Elliott, Ambush Board Co.’s co-founder, general manager and director of e-commerce. Since switching to fraud prevention service NoFraud, there have been zero chargebacks, completed transactions that credit card issuers charge back to retailers when there’s no sufficient proof to counter customers who deny making disputed online purchase. False positives—transactions that look fraudulent but aren’t—are lower too, he says.

The e-retailer, operating since 1997, sells skate shoes, clothing, wakeboard equipment, snowboard gear and accessories online at AmbushBoardCo.com and at a store at its Georgia headquarters. Ambush Board also operates BuyWake.com, which sells wakeboarding gear, wakeboard boat accessories and apparel.

Under the previous fraud vendor, which Elliott declined to name, “We saw the same thieves placing orders every two weeks, and it was a pretty clear indication that they had found a workaround,” he says. Often, Ambush Board employees were the ones detecting fraudulent activity because their “sixth sense” kicked in, especially on products that seemed to attract criminals, such as Oakley sunglasses, Nike shoes, GoPro cameras or watches, Elliott says. But manually checking for fraudulent transactions that escaped detection from the fraud prevention service was time consuming.

With NoFraud, the retailer is no longer double-checking transactions, and the employee who used to vet chargebacks has been deployed to other areas within the business, Elliott says. Switching to NoFraud costs Ambush Board about 20% more per month. The retailer pays a fee, based on volume, for each transaction screened. There is no setup fee to install the service.

The price increase is “worth the 100% drop off in chargebacks,” Elliott says. “Plus, I don’t like [criminals] getting over on me.”

The previous fraud vendor gave the retailer a score from 1-100 on each transaction and the retailer had to decide what was an acceptable risk. With NoFraud, it’s a yes or no decision that is made automatically in a fraction of a second, Elliott says.

Ambush Board’s sales have been “on a good trajectory anyway, so I can’t attribute our increase to NoFraud, but there has been a noticeable decrease in canceled orders as a result of fraud since we switched,” he says.

The new fraud screening also has expanded the retailer’s international reach because it no longer bans internet protocol addresses based on geolocation. For example, a suspect IP address in one country could be reassigned to a different part of the world and be legitimate a year later. “IPs get recycled, so a bad IP in Indonesia one year could be fine in Canada the next year. If you’re banning IP ranges, you’re likely not banning who you intend,” Elliott says. Now, Ambush Board sells and ships to all countries except Russia, which is off the list because of business licensing issues, he says.

Many fraud prevention companies act as insurers by covering the cost of the fraudulent transactions they fail to catch, and retailers pay a set fee for that insurance, says Shoshanah Posner, NoFraud’s head of business development. NoFraud, on the other hand, charges e-retailers a fee of 10 to 20 cents per transaction, depending on the volume of transactions screened. “We leverage our technology base and we’re able to give weights to data points in our algorithm—that’s the brains behind it,” she says. Such data points include device identification, a buyer’s location and lists of known criminals. If a transaction’s authenticity remains unclear, NoFraud contacts the cardholder to personally confirm any questionable decisions.

“NoFraud completely eliminates the need for any type of customer involvement in their fraud prevention, freeing up employee hours which adds to the overall cost savings,” she says. “Additionally, our solution is so incredibly fine-tuned, we are able to keep false declines to a low 0.2%.” 

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