Shimano is putting the brakes on the Fraud Cycle.

The Fraud Problem

The high precision and durability of Shimano products, technology, and design come with a corresponding high price tag. As with all high-end merchandise, they tend to tempt fraudsters and thieves with the possibility of a substantial payoff.

Prior to launching Shimano Indoor Bicycle, Frank Martinez, head of D2C at Shimano North America Holding, encountered a series of high dollar chargebacks on one of the sites within the Shimano family of brands. Having learned from experience, Frank ensured his sites were set up with a fraud prevention system prior to launching the new Shimano sites.

To prevent fraud, Frank Martinez relied entirely on Shopify’s built in fraud prevention system and the filters provided by his payment gateway. His gateway filters were set conservatively, assuming this was the best way to keep the business safe from fraud. Any order with a billing address that didn’t match what the card company had on file was automatically declined, as was the case with any order made with an international credit card or if there was an incorrect or mistyped CVV code.

Shimano’s customer base is primarily comprised of athletes and road cyclists. Due to the outdoor requirement of the sport, many bicyclists travel to warmer climates during the winter months to partake in races and better enjoy the activity. To aid in their ease of travel, customers will order Shimano products and equipment and have the items shipped directly to their travel destination. Their order will reflect miles of distance between their shipping address and billing address, which frequently resulted in Shopify flagging the order as ‘High Risk.’

Similarly, customers participating in overseas triathlons would attempt to have their orders delivered to a freight boarding service to Europe or the Middle East. This would automatically register as a ‘High Risk’ transaction by Shopify and the order would be canceled. Additionally, international customers were not able to check out at all, as the gateway filters put in place restricted the use of all International Credit Cards without exception.

Distressed customers would call Shimano’s customer service department frustrated over their canceled orders and disrupted travel arrangement. The only solutions Shimano had was to either direct them to a local retailer or have their customer service team do extensive research to determine the validity of the transaction, often resulting in order delays and frustrated customers. So much time and energy was being diverted from growing the new business to deal with these fraud related issues.

It became increasingly clear to Frank that it was time to upgrade his fraud prevention system to a more advanced, intuitive solution, and specifically, one that would accurately distinguish legitimate consumers with unusual purchasing patterns from actual fraudsters.