Helping Europe’s number one toy and game retailer grow sales without growing fraud

Like so many sectors, growth in toys and gaming is being driven through online channels. Since 2016 we’ve been helping Smyths Toys, Europe’s largest toys and games retailer, grow their online sales by over 100%—while keeping fraud to less than 0.1% of turnover.

The challenge: Online sales without online fraud

Since 2016 Smyths Toys has expanded significantly in terms of turnover, driven through their online channels. These channels are becoming increasingly complex—with pre-ordering, click and collect and digital downloads, as well as home delivery.

The challenge? Just as online sales are becoming more complex, so is online fraud. How could Smyths strike the balance of maximizing growth with a simple payment experience, without compromising security and making themselves vulnerable? 

The added challenge was Smyths were looking to continue their expansion across Europe. Different regions have different fraud trends. They needed a fraud solution that would enable them to hit the ground running quickly, but also securely. 

It’s relatively easy to stop fraud on physical items. It’s much more difficult with digital downloads. It’s all real time. You don’t have a safety net. You have to be sure that your first decision is the right decision.

- Mark Dinkin, Head of Finance, Smyths Toys

What we did: A fraud tool that’s constantly learning

A key part of Smyths’ payment solution is Decision Manager, our risk management tool that is constantly being informed by over 141 billion1 transactions processed by Visa from around the world. It then uses machine learning to improve decision-making; so, as well as helping keeping fraud out, it helps more legitimate sales get through. 

Add-on protection

We integrated data from third party services into Decision Manager. This third-party "add-on" service analyzes email data, such as IP addresses and domains during the purchase process, to alert Smyths to potential fraud—helping to provide a valuable extra layer of real-time protection. 

Cybersource has enabled us to grow the business in terms of value, but also in terms of the complexity of our sales. At the same time we’ve managed to reduce our level of fraud as a percentage of sales over the last 3 years.

- Mark Dinkin, Head of Finance, Smyths Toys

Real-life, real-time risk support

We also supported Smyths with a dedicated risk analyst. Their job was to constantly check payment data for anomalies. They then work with Smyths to adapt the rules within Decision Manager to shut the door on new risks immediately. 

We have a very close relationship with our managed risk analyst, Melissa. If either of us notice fraud we have a call straight away to implement new rules in Decision Manager in real-time.

- Jess Hanley, Online Payments Manager

Protection during expansion

As Smyths expanded into Austria, Switzerland and Germany, their fraud protection expanded with them. With our experience across the world, we knew what fraud trends they would face and made sure their payment system included region-specific rules to protect them from day one.

Being able to tackle fraud straight away not a day or two later has improved our fraud management hugely.

- Jess Hanley, Online Payments Manager

The difference our work made

+100% rise in online sales

Smyths’ online transactions increased +100% between 2015-19, and during the COVID-19 pandemic, online sales have accounted for more than 40% of total sales, all flowing through the Cybersource platform. 

Lowering fraud since 2015

Throughout this huge rise in online sales, fraud management as a percent of turnover has remained less than 0.1%. In fact, between 2016 – 2020 fraud as a percentage of transactions has decreased. 

Lower chargeback rates despite COVID-19

In 2020, chargeback levels in case terms were less than 2019, despite more than twice as many transactions being processed.

When we moved into Central Europe in 2019, we had no knowledge of the fraud trends over there. But our Cybersource risk analyst gave us their insight and we created a whole new set of rules for those areas. That was hugely helpful to us.

- Jess Hanley, Online Payments Manager

1 VisaNet global transaction volume based on 2020 fiscal year. Volume may not include domestically routed transactions.

Find out more about Cybersource and what we can do for you.