Experience the power of Kombatix Friendly Fraud Defense built into Shopify
How does Kombatix Help Shopify Merchants?
When a fraudster contacts a merchant to initiate a false fraud claim in order to get a refund AND keep the product or service they purchased – that is called Friendly Fraud or First Party Fraud. If the fraudster bypasses the merchant altogether and contacts their bank directly to initiate the false fraud claim, that is Chargeback Fraud.
So how exactly does Kombatix Help Shopify Merchants fight friendly fraud? Let’s look at how it works:
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- Freddy Fraudster tries his frauding (fraudering? fraudstering?) with a Shopify merchant who luckily has the Kombatix app installed and is subscribed to a valid plan.
- The merchant can take the information gathered during the transaction (things like email, billing address, name, and even IP address and card type) and use the Kombatix app to compare it to the information from the point of contact.
- The app will check for indications of fraud on the interaction and provide a Defense Score that will tell you the likelihood of friendly fraud.
- The findings and score are placed in the account notes, and a downloadable PDF report is generated. The merchant or agent can then decline the fraudulent refund request with confidence, explain the evidence, and advise the fraudster that these findings will be sent to their bank directly in case of an additional dispute.
Kombatix can reduce friendly fraud related refunds AND increase chargeback representment win rate!
“That all sounds great, but what does that actually mean for me?”
According to this article on top Shopify categories, the leading seller category in Shopify is Apparel at 27.7%.
The industry average estimate for friendly fraud losses for online apparel merchants is 2% of revenue ($2 for every $100 sold). That doesn’t seem like a lot. Right?
Last year, Fashion Nova sold approximately $1 billion of product.
If they lost 2% of revenue to friendly fraud – that is: $20,000,000
Assuming their average shopping cart was $150,
That’s 67 million total transactions, and 133,000 (2%) are lost to refund fraud.
If they purchased an $3 Advanced Defense report from Kombatix for every claim…
that is 13,000 deflected fraudsters for $1.91 million in retained revenue. After paying the cost for Kombatix Advanced Defense, that represents a NET gain of $1.51 MILLION retained
“But I’m a small merchant that sells digital goods. Those numbers don’t apply to me.”
You are correct. So how does this affect you?
Here’s the 30 second breakdown for a Shopify merchant that sell $19 digital goods:
500 sales/month = 6000 sales/year = $114,000
10% fraudulent refund rate = 600 transactions at $11,400 annually
$1 for a Standard Defense report = $600
Deflect 20% = 120 transactions at $2280
$1680 in retained revenue
Not impressed? Consider the cost of having to fight or deflect these in the "Traditional" way - Dispute Alerts and Chargeback Representment:
