Affiliate Summit East 2010

How to Eliminate Affiliate Fraud 100%

Rey PasinliExecutive Director, Total-Apps

Introduction

• Who is Total Apps, Inc.?

• Causes of Chargebacks

• Traffic flow

• Flags for Affiliate Fraud

• The BIG Picture

Causes of Chargebacks

• Customer Fraud

• Operations

• Customer Service

• Product Fulfillment

• Affiliate Fraud

• Stolen Cards

• Pre-paid Cards

Traffic flow

• Sub-Affiliate• Publisher• Network• Advertiser• Gateway• Processor• Order Fulfillment• Customer Service

Flags for Affiliate Fraud

Approval Ratio• What is an Approval Ratio

• # Approved Transactions / # of Submitted Transactions

• Factors affecting Approval Ratio:• Fraud Scrubbing• Transaction Size• Affiliate Fraud

• What to look for:• 80% - 95% is IDEAL• 65% - 80% is MARGINAL• Below 65% means there’s a problem• What about a 100% approval ratio?

Flags for Affiliate Fraud

Refund Ratio• What is a Refund Ratio?

• # Refund Transactions / # of Submitted Transactions• Factors affecting Refund Ratio:

• Price• Product Quality• Recurring Billing• Customer Service• Order Fulfillment• Affiliate Fraud

• What to look for:• Refund ratio less than 5%• Refund ratio greater than 15%

Flags for Affiliate Fraud

Bad Decline Code Ratio• What is a Bad Decline Code Ratio

• # Bad Decline Transactions / # of Submitted Transactions

• What are the Bad Decline Codes:• Card Stolen• Pick up card• Call Card Issuer

• What to look for:• Multiple Bad Decline code transactions in a row• Bad Decline Code Ratio above 4%

Flags for Affiliate Fraud

Bad Call Disposition Ratio• What is a Bad Call Disposition Ratio

• # Bad Customer Calls/ # Total Customer Calls• What are Call Dispositions:

• Used by inbound customer service centers• Each call is given a disposition or reason code• Bad Disposition Codes:

• Did not authorize• Card stolen• Never placed order

• What to look for:• Bad Disposition Code Ratio above 25%• Don’t forget, consumers lie too!

Flags for Affiliate Fraud

Verification Call Ratio• What is a Verification Call Ratio:

• # Verified Calls / # of Total Outbound Calls Attempted

• What are Verification Calls:• Use outbound calls to verify each order• People who just ordered online should pick up the phone• Make calls in real time, not the following day

• What to look for:• Calls not being answered• Customers should answer phone 50% of the time• Customers don’t validate recent order 100% of the time

Flags for Affiliate Fraud

Chargeback Ratio• What is a Chargeback Ratio:

• # of Chargebacks / # of Total Transactions

• Why are Chargebacks Bad:• They cost you lots of MONEY• Get over 50/100 and you’ll lose your merchant account• Get too many chargebacks and you’ll get fined $100K!

• What to look for:• Chargeback ratio over 2%

Flags for Affiliate Fraud

Rebill Ratio• What is a Rebill Ratio:

• # of Rebills / # Initial Transactions

• What affects the Rebill Ratio:• Price• Customer Service• Fulfillment• Affiliate Fraud

• What to look for:• Rebill Ratio less than 65%

Affiliate ID

# of Trans Approval % Decline %

Refund Ratio

Bad Decline Code Ratio

Bad Call Ratio

Verification Call Ratio C/B Ratio Rebill Ratio Score

1 100 60% 40% 2% 0.05% 5% 90% 1.00% 65% 0.67%

2 200 75% 25% 5% 1.00% 10% 80% 2.00% 70% 0.41%

3 300 80% 20% 7% 2.00% 15% 75% 2.00% 60% 0.26%

4 400 84% 16% 9% 3.00% 20% 70% 3.00% 75% 0.24%

5 500 88% 12% 12% 4.00% 25% 65% 3.50% 55% 0.17%

6 600 90% 10% 15% 5.00% 30% 60% 4.00% 80% 0.19%

7 700 25% 75% 18% 6.00% 35% 55% 4.50% 50% 0.06%

8 800 65% 35% 22% 7.00% 40% 50% 5.00% 85% 0.14%

9 900 91% 9% 6% 8.00% 30% 40% 5.50% 45% 0.09%

10 1000 29% 71% 25% 15.00% 50% 30% 6.00% 90% 0.06%

The Big Picture

Questions & Answers

Rey PasinliExecutive Director

rey@total-apps.com(949) 274-8975 X108

www.total-apps.com

Poll: Q&A for How to Eliminate Affiliate Fr...