Fraud prevention application Thirdwatch helps E-Commerce businesses on Shopify save a lot of money on Return-to-Origin (RTO) costs especially for Cash on Delivery (COD) orders. Before we get into the details of how to install Thirdwatch and how it can be effective, allow us to explain the advantages and features of Shopify as an e-commerce business hosting platform.
A little over a decade ago, if you had told us that there was one website that garnered over 218 million buyers from 175 countries in just a year, we would’ve laughed at the sheer uncertainty.
But, things have changed beyond imagination in the last decade. As we’re hitting the ceiling with hypercompetitive creativity, it’s important to take a step back and look at how we got here.
In this article, we’ll be speaking about how a single-player, Shopify has transformed the e-commerce industry as we know it and most importantly, how you can use the channel to supercharge your business.
What does Shopify do?
To start with, Shopify is an all-in-one platform to start, run, and grow an e-commerce business. India is a country majorly driven by small and medium businesses and for small players to grow, there needs to be a platform that allows them to run their business seamlessly. This is where Shopify steps in.
With a Shopify account, here is the multitude of things that e-commerce merchants can do:
- Start your business journey: Find a business name, buy a domain, and create a brand with Shopify’s free tools suite.
- Sell everywhere: Use one platform to sell products to anyone, anywhere—online with your e-commerce store, online marketplaces, and social media, and in-person with point of sale.
- Market your business: Take the guesswork out of marketing with built-in tools that help you create, execute, and analyze campaigns on Facebook and Google.
- Manage your operations: Use a single dashboard to manage orders, shipping, and payments anywhere you go. Gain the insights and knowledge you need to grow.
What is the Shopify App Store?
Once you’ve set up your Shopify account, it’s easy to find a ton of features and plug-ins designed to accelerate your business. Shopify’s App Store is filled with thousands of applications designed to cater to your every business need.
And that’s Thirdwatch’s entry into this article! The protagonist of this story has finally come into the limelight.
The e-commerce market in the world is growing at a rate faster than we can comprehend. With unforeseen growth comes unforeseen responsibilities. E-commerce sales worldwide are predicted to reach $632 billion by 2020!
But, do you know what’s bigger than the market itself? It’s the implications of fraud that come with it. As the trade grows, it’s only fair to assume that the online market has become a breeding ground for online fraudsters to innovate their tactics.
E-commerce fraud is one of the least talked about things for an industry so big. Most merchants assume the losses or fraud instances experienced during their stint is just “cost of doing business”.
A closer look at e-commerce fraud
Here’s the thing– e-commerce businesses don’t have it easy, especially the small ones. In a hypercompetitive e-commerce environment, the only way to stand out is to offer exceptional customer satisfaction.
To meet with the mounting expectations of customers, businesses often don’t have a choice but to ship risky orders, in the fear of losing out on a genuine customer. This can often put a toll on their budget, as Return-To-Origin (RTO) orders take up the cost of logistics back and forth, often leading to losses.
Here’s how e-commerce companies lose money in processing these orders:
- Forward & reverse logistics
- Blocked Inventory (Items stuck in transit)
- Physical quality check and re-packaging of returned items
- Increased probability of damage to fragile items, and hence more money spent in shipping them
- Operations costs in processing these orders
We took the time out to check out the RTO numbers and their true impact on business. Here’s what we found– in case of COD orders, the percentage of RTO orders can be as high as 40 percent!
Imagine spending double the shipping costs for 40% of all your orders, let alone the opportunity cost on the blocked inventory and operations costs to handle them.
Read more: Is 30% RTO the Cost of Running an E-commerce Business?
How can Thirdwatch help reduce RTO costs?
Thirdwatch is a simple plug-in that helps you detect fraud orders, impulse purchases, non-deliverable addresses and flag risky transactions in real-time and finally, improve profitability.
And what’s better? If you’re a Shopify merchant, Thirdwatch integration can be done in minutes, it’s that easy! Here are the simple steps:
Step 1: Install the Plug-in on the Shopify dashboard
Step 2: Sign up on the Thirdwatch dashboard with your account ID and password.
Step 3: Your centralized dashboard will be updated with the order status, along with actions for decision making. Start detecting fraud and saving money!
Thirdwatch runs on Artificial Intelligence and Machine Learning to help identify fraudsters across different platforms. Machine Learning technology offers the right solution as it addresses all the challenges in preventing fraud — scale, complexity and changing patterns.
For example, by adding the price of the user’s phone device or categorizing an address as five stars or one star, we turn meaningless data (phone model) into actionable information. This increases the accuracy of the red or green flag that the machine learning models generate for every transaction.
Network effects can be harnessed by pooling in anonymized data to predict and prevent fraudulent behaviour. This de-incentivises and penalises fraudulent behaviour across the ecosystem.
Moreover, e-commerce firms will truly know their customers so that goods are delivered to a person not merely to an address.
Most importantly, RTO will no longer be just the “cost of doing business”.
Here’s what Shabaaz, Founder of Nicci SkinCare, an established online cosmetics store on the Shopify platform, had to say about Thirdwatch.
We’ve been in the business for a few years now and Return-To-Origin orders are a big problem for businesses like ours. Using Thirdwatch has helped us in dealing with incomplete addresses and in detecting impulse and fraudulent orders. Our RTO rate (significantly) reduced by 30% because of Thirdwatch and we saved over INR 1.5 lakhs monthly in shipping costs! Highly satisfied with the product
Curious to know more about how we’re solving this for merchants? Get in touch with a Thirdwatch expert today!