Fraud threats increase along with online shopping during the holidays, and many e-retailers face the choice of declining possibly good orders or approving suspicious ones. Here are some considerations when thinking about outsourcing some or all of your manual reviews.

Rafael Lourenco, executive vice president, ClearSale

Rafael Lourenco, executive vice president, ClearSale

The holiday shopping rush isn’t just for busy consumers, it’s also a time when fraud attempts spike against online retailers. As many as 43% of CNP orders during the holidays are fraud attempts, according to the LexisNexis 2017 True Cost of Fraud Study.

And as organized crime gets better at beating basic fraud-screening procedures, merchants seem to face a choice: Risk losing good customers by automatically declining more orders or risk slowing down fulfillment by manually reviewing more orders. However, merchants can also opt for more manual review and outsource it to a third-party fraud prevention service. The cost can be well worth the savings in staff time, lost sales, and fraud costs.

Even if your customers aren't official VIPs, they must be treated with courtesy and care.

When to consider outsourcing your peak-season manual fraud screening

Is working with an outside fraud-prevention provider worth considering for this holiday season? It might be, if any of the following are true for your business.

  • Your internal fraud team has concerns about fraud protection during peaks. When your in-house experts tell you there’s not enough staff to conduct quality manual reviews, or when they’re concerned that false declines will hurt your holiday revenue, it’s time to consider contracting with a service.
  • You’ve experienced order-decision bottlenecks during past sales peaks. Good customers don’t like to wait for their orders to be approved. Delays can lead customers to complain and cancel pending orders. Outsourcing manual review can reduce or eliminate the slowdown.
  • You’ve suffered higher fraud losses during past sales peaks. If you saw a rise in fraud last holiday season, you know your fraud-reduction program needs improvement. Those thieves will probably come back this year and then some, because fraudsters tend to share their finds with other criminals.
  • Your false decline rate has increased during sales peaks. Industry-wide, false declines cost merchants more money than fraud When you decline a good customer you lose the sale and the value of their future business, because there’s a good chance they won’t shop with you again.
  • You have VIP and social-media influencer clients you can’t afford to alienate with false declines or poor customer service. Effective manual review requires both the ability to spot complex fraud and the ability to deal with well-heeled customers in a tactful, service-oriented way.

What to look for in a manual fraud-screening service

If any of these situations are familiar to you—or if you want to turn over the responsibility of manual screening to someone else—it’s time to consider outsourcing during the holiday sales season. To get the most benefit from this decision, there are a few things to consider before you choose a manual review provider.


Do you need the provider to manually review all of your flagged orders or just the “overflow” orders your team can’t get to quickly? If so, what kind of communication and coordination will your in-house team have with the provider?

What’s the provider’s record of false declines? A reliable provider will maintain this data and share it with you, so you can be assured you’re not trading a fraud problem for a false decline problem.

How well will the provider treat your customers? Even if your customers aren’t official VIPs, they must be treated with courtesy and care. Order inquiries should be approached as a customer-security measure rather than a potential crime. And your customers should be contacted in their preferred language at a time of day that syncs with their local time zone. This kind of customer outreach requires a level of expertise that a generic call center can’t offer.

How is the service priced? Will you be charged per transaction, per hour, or by some other metric? Are there surcharges for peak times and volumes?

Does the service protect you from chargeback fraud costs? A good provider will offer a guarantee of coverage for any fraud-related chargebacks that make it past their manual review.


Get the answers to these questions before you make a selection. You can also look at outsourcing manual review during peak seasons as a way to “test drive” different fraud-protection providers and compare their service and pricing without a long-term commitment. Exploring your options now can save you time during the holiday rush and later, if you decide to outsource manual fraud screening year-round.

By planning now to send your manual order reviews to third-party experts, you can reduce your holiday-season fraud risk, avoid false declines of your good customers, keep your order fulfillment process running smoothly, and free your staff to focus on other tasks during the all-hands-on-deck holiday sales rush.

ClearSale provides online retailers with fraud-prevention technology and services designed to protect against chargebacks.