Riskified Riskified

Slashing Risk to Scale Up Expansion

How Skullcandy eliminated manual review and chargeback risk to safely sell headphones all around the world

Business Impact
  • 100% reduction in manual review costs
  • 0 customer friction
  • 7% increase in approval rates

Meet Skullcandy

When Rick Alden founded Skullcandy in 2003, he had a simple guiding principle: headphones should look great, sound great, and be affordable. Today, Skullcandy’s products have become a cultural icon, prized by extreme athletes and indie musicians alike, with their Astro headsets becoming a favorite among gamers.

The brand extends well beyond headphones: Skullcandy is a major sponsor of the Vans Warped Tour and is launching its own live streaming initiative, the #StayLoud sessions. With brand ambassadors like point guard Kyrie Irving and snowboarder Mark McMorris, Skullcandy is at the intersection of fashion, music, and pop culture.

Riskified
Rob Leo

Sr Manager of Global Credit Risk & Treasury

To meet increasing international demand we hastily set up a Canadian site without a decision manager in place. We were immediately hit with a staggering amount of chargebacks. We needed a scalable fraud solution to help facilitate global expansion.

The Challenge

As Skullcandy’s website became an audio gear destination, the company started encountering fraud. In 2015, when the brand launched sites in Canada and Europe, its chargeback rate exceeded 1%. Skullcandy was in no position to deal with this threat: the company’s US orders were vetted by a credit card gateway, but international orders were unscreened.  The last line of defense was a manual review team that quickly became completely overwhelmed.

Skullcandy brought in contractors to review orders, but they were inexperienced and expensive. Overhead costs soared while approval rates dipped. There was a heavy reliance on friction-filled interactions to verify customer identities, yet the customer care team was dealing with angry declined shoppers. Skullcandy needed a scalable fraud solution that could support their rapid international growth without sacrificing the shopping experience.

Riskified
Rob Leo

Sr Manager of Global Credit Risk & Treasury

Review times were long and customer friction was hurting our brand. Riskified’s process is totally invisible: they’ve eliminated customer friction and significantly reduced our overhead costs.

Choosing a Solution

Skullcandy considered several fraud prevention solutions and decided an all-inclusive one would be the best fit since it would be scalable and also eliminate the need to maintain a costly review team. The company was impressed by Riskified’s technology and by our 100% chargeback guarantee and ability to boost approval rates. A quick integration later, and Riskified was reviewing all of Skullcandy’s order volume.

Results
Higher approval rates

Higher approval rates

7% overall approval rate increase
  • Riskified approves 98% of Skullcandy
    and Astro orders
Rapid International Growth

Rapid International Growth

40% annual growth in Canada and Europe
  • 99% approval rates for Canadian site orders, 97% from European sites
Improved Operational Efficiency

Improved Operational Efficiency

100% reduction in manual review costs
  • Skullcandy no longer needs temporary employees to vet orders for fraud
Fraud-related Losses Eliminated

Fraud-related Losses Eliminated

0% cost of fraud-related chargebacks
  • Skullcandy’s chargeback rate is near zero, eliminating hassle and chargeback penalties.
Riskified
Rob Leo

Sr Manager of Global Credit Risk & Treasury

Riskified was the scalable solution we needed. Their 100% chargeback guarantee means we can concentrate on selling globally without worrying about fraud.