Exclusive Q&A: Regional retailer cuts online fraud to under 1%

Specialty apparel chain TYLER’S is addressing online fraud at digital checkout, with impressive results.

Chain Store Age recently spoke with Justin Dermit, director of e-commerce and marketing at TYLER’S. Based in Austin, Texas and operating nine stores, when TYLER’S migrated to the BigCommerce e-commerce platform, it took advantage of new opportunities to combat what had been a continuing problem with online fraud.

What issues was TYLER’S having with fraud?
The types of fraud we’ve experienced have been pretty typical for most e-commerce or retail brands - fake identities, stolen credit cards, reshipping and chargebacks. But the real problem we faced before migrating to BigCommerce was the volume of fraudulent purchases and false positives where the fraud detection system would collect payment first, then check for fraud after the fact.

Customers were calling and saying their orders were marked as fraud, while the system was missing orders that should have been flagged but weren’t. It was costing us a lot of money on shipping and processing fees, not to mention the enormous amount of time spent monitoring and verifying orders to fix mistakes and the longer-term damage to our brand.

We were seeing 15-20 chargebacks per month and losing 8-9% of sales revenue. As you can imagine, that was putting a tremendous dent in our profits, as well as affecting customer service and overall shopping experiences. 

How and why did TYLER’S select and implement new checkout and fraud detection technology?
When we moved to BigCommerce, we had an incredible amount of options for technology integrations to choose from. The digital payments solution, Bolt, stood out because it addresses both fraud and checkout, and that meant we could fix the problem we were having with fraud and give our customers a better experience at the same time. Bolt offered a smooth checkout experience that was optimized for mobile and included single-click checkout for returning customers. Additionally, we liked that its fraud monitoring accounted for customer behavior, such as how long they spent on a particular product page.

What have the results of deploying the Bolt platform been?
With Bolt, it’s night and day because they handle the entire checkout process in such a unified way. We were integrated through the BigCommerce platform and operational within two days. Bolt is always developing new features and pushing updates that keep us on top of everything cybersecurity when it comes to checkout.

The results have been nothing short of incredible. TYLER’S implemented Bolt’s fraud detection platform in October 2019, and our fraud losses have dropped to 0.2%. This represents a 40x reduction at a time when our e-commerce channel has been booming and e-commerce fraud has also been growing.

COVID-19 increased fraud for a lot of retailers, and we were fortunate to have Bolt in place prior to the pandemic. I credit them for helping us maintain our operation during COVID-19. I don’t want to think about what 8-9% of sales lost to fraud might have looked like over the last 18 months. It would not have been pretty.

What advice would you give other retailers dealing with fraud issues?
We are all going to have to deal with fraud. It’s a fact of life, and we’ll never avoid it completely. If you think you don’t have a fraud problem, you’re wrong. Everyone does. Retailers need to address it head on regardless of how small or big your company is, or how small or big you think your fraud problem is. You have to think about the collateral damage as well.

Even if you aren’t losing 8%-9% to fraud like we were, you are taking a hit both financially and reputationally. Those can build and eat away at your profits and your brand over time.