Founded in 2009, Vestiaire Collective launched with the aim of offering a high quality online marketplace in which members could buy and resell premium desirable fashion in a trusted environment. The site stands out from other platforms due to its knowledgeable curation team, authenticity and quality control process, and its extensive active community of global fashion lovers. Six years later Vestiaire Collective is now Europe’s leading trusted site for the resale of desirable premium and luxury fashion, and a cult favourite amongst style lovers with over 3 million members located in 40 countries worldwide.
We interviewed Michael Benisti, Head of Payments and Revenue Protection at Vestiaire Collective, who shared his tips for managing fraud while providing great consumer experience.
Vestiaire Collective is a very strong brand. What tips do you have for other retailers looking to build and strengthen their own brand online?
Vestiaire Collective’s marketplace business model is unique. I think the three key things that have helped us grow and become successful are:
1. We invest resources to ensure we have a great product catalogue. In fact, only 70% of the products submitted on the website are published. We employ a team of a dozen curators who review every item submitted for sale. The fact that we don’t accept all the luxury items submitted for sale allows us to have a very high catalogue quality. To integrate our catalogue, the products need to be on trend, in a good or very good condition.
2. We provide added confidence in the transaction. Luxury goods in our catalogue can cost up to 40,000 euros. Obviously when you buy something online without even seeing it – you need assurance, quality control. That’s what we provide with our curation and authentication teams and with our quality control process.
3. We provide a unique shopping experience because our website serves as an online community for fashion enthusiasts. On any product page on our website, you will see many comments – especially on the most iconic items. Users can like an item, share it, or follow someone – for example another member from whom they previously purchased an item and whose style they appreciate. The community aspect makes the shopping experience with us much more dynamic than buying off a standard marketplace.
Based on your experience, what steps do you recommend taking to provide an optimal shopping experience for online customers?
There are plenty of steps necessary to provide an optimal online shopping experience, but as the Head of Payments, I know that the payment funnel is very important to the shopping experience. You need to make the payment part of the transaction as easy as possible. This includes not only the payment process itself, but also what happens next – once you’ve provided your payment details and placed the order. No one wants to wait long for their payment or sale to be confirmed.
Where do you go – blogs, publications or industry events – to learn about new technologies or ideas relevant to payments or fraud prevention?
We are always learning, and constantly going to eCommerce and payments events. Locally, we attend events held by Fevad, the central eCommerce organization in France. But we also participate in international events – such as MRC Every manager within Vestiaire is connected to its peers to benchmark solutions and exchange best practices.
In addition, over the last 6 months, Vestiaire Collective issued half a dozen request for proposals (RFP), because we’re growing quickly and have evolving needs. Receiving the submissions to our RFPs has made us smarter – we have a better understanding of what’s on the market, what solutions are out there. In our last RFP concerning a switch to a new PSP, we learned a lot about best practices, we challenged every contender to understand exactly which features and functions they offer, and constantly realized new needs along the way that could create value for us.
What is your favorite fraud-related story or anecdote? The funniest fraud attempt you’ve come across?
About a year ago we had a Rolex order for 20,000 euros – a very high amount. In terms of the order details, the IP was in Mexico, using a proxy, but every other detail was in the US – so we figured perhaps the customer may be an American guy on vacation. However, what made us suspicious in the first place was that the order was placed within 5 minutes on our site – and it was this customer’s first time connecting to the Vestiaire marketplace.
Obviously, we wanted to avoid fraud, but we also had to be sure not to make a false decline – especially since this could be a customer with an extremely high lifetime value for our business. We reached out to the buyer and asked for a copy of his ID and a bank statement. He provided these documents, but it seemed like he sent them over a bit too quickly. In addition, we searched but didn’t manage to verify his identity online. Since I was undecided, I consulted with a colleague – who suggested calling the issuing bank.
Based on the BIN we identified the issuing bank, and after explaining ourselves to their customer service we got to the right person on the line. Two minutes later the bank representative notified us that the order was fraudulent and that the credit card had been cancelled. That’s how we came up with our ultimate ‘judgment day’ fraud prevention methodology – calling the issuing bank.
The fraudster had invested a lot of effort in this fraud attempt – and once we cancelled the order, he kept contacting our customer service to ask where the order was. It’s always the fraudsters who are most adamant about their orders!
What advice can you give online retailers/merchants who are looking to expand their business internationally and sell across markets?
Local feedback and input are key when expanding operations to a new market or region. In my experience with payments, it’s important to offer the most popular local payment methods. If you simply ask your PSP about payment methods in the new market they will only ever recommend or mention the payment methods they support. So it’s crucial to find the right person who is in the know. You can try consulting with institutions or organizations that help foreign businesses work in the target market.
Many merchants start preparing for the holiday season over the summer. Do you have tips to share with online retailers looking to prepare their fraud operations for the holiday rush?
The two most important goals to keep in mind, especially during the holidays, are avoiding false declines and providing a quick turnaround time. In other words, make sure that the fraud review process doesn’t negatively impact your customers’ experience – that you don’t get any complaints or questions related to this process.
If you’re worried you won’t have enough hands on deck to process and review incoming orders, you should get help from colleagues in another team. You can quickly provide them with some training and let them handle basic, “level 1” orders. It’s up to you to define what “level 1” orders are – it could be orders of up to 200$, certain payment methods for which you have a very low chargeback rate, etc.
Actually, I trained a colleague of mine who is an accountant within a single day to handle ‘level 1’ orders. It’s true that specifically for Vestiaire Collective, reviewing orders for fraud might be easier than it is for other merchants – because we have buyers’ profile information, their page on our marketplace, comments they posted on product pages, a profile picture. But as long as you define what data needs to be taken into account, and what the rules are for making decisions – it shouldn’t be too hard for them to understand. Once you teach someone what the reassuring and suspicious indicators are – and how to reach a decision – it’s not that difficult.
Before I took over the fraud position, there was in my opinion a problem of resources capacity. This is why I immediately decided to outsource the fraud review process and ended-up partnering with Riskified after a quick RFP. For Vestiaire Collective, Riskified was a great help last June: I was getting married and took an entire month off. I was confident that I was leaving fraud review in the right hands as Riskified has proven itself since we started working together with very high approval rates and an outstanding average turnaround time of 20 seconds.
Vestiaire Collective and Riskified
Vestiaire Collective became a Riskified customer in early 2015. At first, an in-house fraud analyst would review orders during the day, and only transactions that came in overnight or during the weekend were submitted to Riskified for review. However, when Vestiaire’s single fraud analyst left the company, the retailer turned to Riskified for fraud management.
With Riskified, Vestiaire enjoys high approval rates, a full chargeback guarantee on all approved orders, and significantly reduced fraud review turnaround times. This helps eliminate tensions and keeps both sellers and buyers on Vestiaire’s marketplace happy. As it is a luxury goods retailer, the lifetime value of Vestiaire Collective’s customers is exceptionally high. Therefore, the key advantage of utilizing Riskified is the peace of mind in knowing that every effort is being made to avoid false declines.