Pat- Thank you for your post. We at Quova enjoyed reading it and were glad to see that you appreciated the spirit behind our Valentine’s Day package. While the gift was clearly the attention-grabber, we did have a serious intent—to demonstrate the very real threat of card not present fraud, a critical security issue for online retailers. After all, online fraudsters worldwide weren’t joking around when they unlawfully carried off $3.1 billion in goods from e-commerce sites in 2006.

But there was another clue in our mailer as well. Pinpointing the physical origination point of an order on the Internet and comparing it to the bill-to and ship-to address is one of the most effective tools in combating online fraud.

Many online retailers already use some type of fraud risk scoring method. They may look at whether the buyer is a new or repeat customer, the nature of the purchase, especially a very expensive one, the type of shipping request, credit card security codes and more. But one item frequently overlooked is reviewing a customer’s location when they place an order online. By adding just this one step of comparing the customer’s billing address to his IP address location to the transaction, one Quova e-commerce customer was able to detect an additional 70 percent of his online fraud.

Think about it—nearly every business decision is affected by geography: language, currency, shipping, taxes, licenses, government regulations and more. When a customer walks into a brick-and-mortar store you can tell a number of things about them right away: age, gender, what they’re shopping for, whether they’re return customers. But when a customer visits your retail website, you know exactly none of these things…where they are, what they want, what brought them in, or how likely they are to be crooks. It’s an anonymous process. Knowing the geographic location of your web visitor can provide the same sort of data for an online transaction. So the fact that Tom isn’t actually based in your office was an indicator that something may have been amiss with the package.

Quova does this with a technology called IP Geolocation, which can tell you where your online customers are and how they connect to the Internet as soon as they visit your site (through their IP address). There’s no need to ask for further information or store cookies in their browsers. The service is offered on a subscription model and is easily deployed with an API to your web application.

So while we see we sparked some humorous discussion around your office last Thursday, we also hope that we spark some more meaningful discussion among your readers about the best practices in geolocation technology, and the role it can play as part of a comprehensive online fraud prevention strategy for retailers.

Kerry Langstaff is vice president of marketing for Quova, Inc.

Do you think Quova’s marketing tactic was successful?

As multichannel retailers, how do you help secure your customer’s data?

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Never would I have thought that something in my office would happen today that would be more entertaining than what the guys at CollegeHumor.com came up with in the post below. But, here’s my story…

As you may know, Electronic Retailer magazine is based in Southern California. However, I work out of ERA’s D.C. office. I often get mail for my California co-workers at the ERA address and I simply put it in another envelope and send it on. Earlier today, my co-worker Stephanie came into my office and placed a FedEx box on my desk addressed to our executive editor, Tom Dellner. I e-mailed Tom and told him I had a package here and asked him if he wanted me to open it and see what it was, or simply send it along in another FedEx box. Tom told me he wasn’t expecting any mail, that it was probably a press kit, and that I should just open it and make a judgment call.

As I’m opening the FedEx box, I hear my co-workers chatting down the hall. I walk into Robin Greenspan’s noisy office while slowly opening up the box. As I look inside, I see a red bag with hearts all over it. I realize it’s a personal item and my face begins to blush a bit. Everyone in the room starts asking me what it is, as my co-worker Stephanie blurts out, “It’s for Tom.” That’s where the trouble begins.

“It’s a gift!”

“Tom sent you a gift?”

“Tom Dellner??”

“Is Tom gay?! I thought he was married??”

“Is Tom having an affair?!”

Avoiding the awkward questions, I rush back to my office with Stephanie to look up Tom’s home address and ship it out ASAP. While trying to move the contents from one FedEx box to another, I see an order form that reads “Fuzzy Handcuffs,” right as Stephanie pulls them out to place in the new box. Not being able to fathom that things had escalated to handcuffs, our co-worker Christy walks by, sees our astonishment, and demands that we tell her what else was in the bag.

Acknowledging that things couldn’t get much worse, I pull out the order form and much to my surprise, a note was attached to it from a company called Quova. “Hello Tom. Relax. Don’t panic. It’s just a joke. We at Quova just wanted to send you a nice little Valentine’s Day surprise we knew would grab your attention.” The note goes on to talk about Quova’s expertise in online data security and privacy. Congratulations to Quova—your guerilla marketing tactics mortified me and certainly got our attention and disrupted our entire office.

Oh, and don’t think I wasn’t above putting the gift bag on Barbara Tulipane’s desk while she was out to lunch with a note that read, “From Your Office Crush- XOXO.”

Pat Cauley, eMedia editor, Electronic Retailer Magazine

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