How retail is using AI to prevent fraud

Jennifer: He says that the management of fraud in places like this has changed quite a bit since he started the job. For example, they used to set up a filter based on some simple questions.

David Cost: That’s a customer we’ve met before, isn’t it? We have certain flags that we’re going to look for and someone’s going to look at those orders for themselves and sort of have to guess whether they think the order is good or not. We ship it out and if it’s not good, then we, the retailer, you know, take the loss. So it’s as if someone stole those goods. It’s the same as stealing. You know, and it can, it can have a real impact on your business and you want to be careful. If you are too cautious, you will turn good business. I mean, there’s nothing worse than taking a customer with a good valid payment form and telling them, no. Sorry. It doesn’t look right, so we won’t send it.

Jennifer: One point Rainbow makes against this… is doing business with buyers in other countries.

David Cost: So they are ordering from one of the islands in the Caribbean. So their billing address is a Caribbean address, they primarily ship items to a Florida or Texas re-shipper where a bunch of orders are combined to get to the island. island, right? And then they were put on those islands. These are good customers but for traditional scams, to be able to see foreign credit cards, foreign addresses, but a US shipping address will sound all sorts of alarm bells. So the sophistication of AI now to be able to help us figure out exactly what’s good and what’s bad, allows us to raise our level of customer service… So, we are taking care of customers simultaneously, minimizing potential loss to business, with orders that we will fulfill and ship and then go unpaid.

Jennifer: Rainbow is using a tool from fraud detection company, Signifyd… and he says these days they drop less than 1% of orders.

David Cost: In the past, when we had to do all this manually… they would go to Google Maps and look up the address to see if it was legit. You know, now with the sophistication of technology to know who you are, where we’ve seen your order, the digital ID on your device, the distance between your billing and shipping address. friend. Lots of factors. So again, even five or six years ago, that process was manual and could take a day or two, you know, now they’re being done in a fraction of a second.

Does Douglas Heaven: I mean, this happened to me yesterday, you know, I got a text message. I took my car to the garage and, you know, put in a bigger amount than usual.

Jennifer: That’s Will Douglas Heaven, Tech Review’s senior AI editor.

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