GUESS? Overcomes Online Fraud

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GUESS? Overcomes Online Fraud

• By Heidi Larson

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GUESS, Inc.

• Started as a jeans company
• Now makes all types of apparel
• Brick-and-click company
• Guess.com launched in 1999

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Financials

• 2003 Sales - 636.6 million
• Increase from 2002
• 2003 Net Income - 7.3 million
• Increase from 2002
• 4,800 employees in 2003

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Major Competitors

• Levi Strauss Co.
• 2003 Sales- 4.09 billion
• 2003 Net Income- (349.3) million
• Gap
• 2003 Sales- 14.45 billion
• 2003 Net Income- 477.5 million
• Diesel
• 2003 Sales- 760 million

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Problem

• People started using stolen credit cards to order
  products from Guess.com
• Company is responsible for cost
• Company experienced huge losses

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Solution

• CyberSource Internet Fraud Screen (IFS)
• When credit card is used, information is
  transferred from Guess.com to CyberSource
• Routed to cards payment processor and is either
  accepted or declined
• CyberSource determines fraud risk
• Transaction obtains risk factor
• GUESS makes decision to accept or reject card

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Questions

• This system is used for online credit card
  payments. Can it be used for other e-payment
  methods? Explain.
• This system could be used if people use
  electronic checks. They can make sure there is
  money in the account.

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Questions

• What are the advantages of such a system for
  GUESS?
• GUESS reduces cost with fraudulent purchases.
  As a result, they can keep their prices to a
  minimum. Also, not only do they catch thieves,
  but they also prevent thieves.

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Questions

• Review the benefits for international export.
• With this new software, GUESS is able to convert
  currencies. This makes it a lot easier to sell
  products to foreign countries.

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Questions

• Relate this case to the opening case of this
  chapter. Do you think that this solution could
  be applied to LensDocs problem? Why or Why not?
• Yes. LensDocs current system is slow and
  outdated. By using this solution, the process
  would be quicker.

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Conclusion

• Online fraud is a major problem
• All online companies need a plan
• GUESSs use of CyberSource is an excellent
  example
• By doing this, they save themselves time, money,
  and frustration