Skullcandy Taps AI to Fight Fraud, Reduce Decline Rates
Audio brand Skullcandy has bolstered its fight against fraud with AI-enabled functionality.
The company sought out a solution after becoming concerned about lost revenue when non-fraudulent consumers were reaching out about declined orders. Skullcandy wanted to know if overly conservative approvals were to blame and if they could reduce decline rates without opening the door to increased instances of fraud.
As a result, the company began working with Riskified through the Shopify app to improve fraud monitoring.
The first move introduced a new layer within Skullcandy's internal workflows that automatically reviews certain declined transactions, rather than treating every declined order as an automatic cancellation. The company's e-commerce and IT teams were then able to better track decline rates alongside chargeback performance while still ensuring fraudulent transactions were not fulfilled.
Checking chargebacks is typically a time-intensive, manual process, but the AI-enabled tool automatically pulls information from multiple payment portals in real-time into a single dashboard that auto-populates dispute case data. This reduces the process from over thirty minutes to only five.
By using the automated tool, Skullcandy has been able to recalibrate its approval thresholds, which has helped to drive a four-times increase in approved revenue with a negligible 0.06% chargeback rate over 12 months. Additionally, it has decreased the number of customer support tickets that were flagged as false positives.
Zach Belles, director of IT at Skullcandy, said in a statement that the approach has made managing fraud and performance easier by leveraging a support team that can help reliably solve problems.
