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Getting Started With Manual Review

Whether you’re holding orders before fulfillment or reviewing orders after an accept/reject decision has already been made, what are the best practices for manual review of transactions?

Why Review Transactions At All?

Before getting started on specifics, let’s ask: What is the point of manual review? If you have fraud tools in place, why have a human being look at transactions at all?

Even the best-designed system will occasionally flag legitimate orders as suspicious and overlook the occasional fraudulent order. The only way to assess the shortcomings of a system is to review its predictions. This could be done by judging the system only by the misses that lead to chargebacks, but this approach would completely ignore legitimate orders rejected in error.

Even the best designed system will occasionally flag legitimate orders as suspicious and overlook the occasional fraudulent order.

Additionally, for transactions that are neither extremely safe nor extremely risky, gathering more information before making a decision may be the best financial course of action. For example, suppose a particular $200 order has a 50% chance of being fraudulent based on available information, and your profit margin on the item in question is 20%. If you guess the order is legitimate and you’re wrong (which you will be half the time), you’ll lose $200. If you guess the order is fraud and you’re wrong, you’ll lose $40. If those are your only options, you’re better off assuming the order is fraud and cancelling it, losing an average of $20 each time.

If, on the other hand, a manual reviewer could tell with certainty whether the order is legitimate, and it took only a few minutes to make that determination, you could prevent that average $20 loss with minimal investment.

There are certainly businesses for which delaying orders from fulfillment doesn’t make sense, especially when average order value is particularly low. But as long as any orders are being rejected, reviewing the results is a necessity.

Factors to Consider

Whether to put orders on hold: Deciding whether to put some orders in hold until they can be reviewed depends heavily on the nature of your business. If orders fulfill only once a day or less (for example, weekday afternoons when you ship a physical good), holding risky orders for review makes a lot of sense. If, on the other hand, instant fulfillment is inherently necessary (as with cab rides, for example) or if nothing is lost if you issue a refund once you learn a transaction is fraudulent (as with access to an online game, for example), holding orders for review might not be the best solution.

Hours of operation: If you’ll be putting orders on hold, what days can those orders fulfill? What times? If you plan to take inbound calls, do you want someone on hand to answer at all hours, or will you use voice mail to field some responses?

Role of reviewer judgment: What overall standards do you expect reviewers to employ when deciding what to do with orders? Generally, you should rely on the judgment of the people making decisions, rather than giving them very strict “cancel the order when this, release the order when that” rules. Rules, after all, are easily automated, and you should generally avoid using people for anything that could be automated. Instead, provide clear guidelines for what to look out for in general and which way to lean in certain situations (if it’s under $X don’t bother calling to ask about it, for example).