CASE STUDY
CD Baby Cuts Manual Reviews and Chargebacks with Kount
CD Baby is the world’s largest online distributor of independent music. The company helps independent artists sell their music on cdbaby.com, iTunes, Amazon, Facebook and more — as well as on compact disc and vinyl records.
THE PROBLEM
Fraud attacks drive up chargebacks.
CD Baby was hit by recurring fraud attacks that drove chargebacks up to 2.6% of transactions. The fraud was occurring in three areas:
- Card testing — Attracted by the 99¢ per download price, fraudsters were testing up to 100 stolen cards per day.
- New account fraud — Fraudsters would join CD Baby pretending to be artists and create an album using stolen music. They would then repeatedly purchase that album with stolen cards in order to collect artist commissions fraudulently.
- Affiliate fraud — Fraudsters posing as affiliates would make purchases using stolen credit cards and collect fraudulent affiliate commissions.
Eighty percent of my time, seven days a week, was spent trying to contain fraud. It was like whack-a-mole.
— Christine Barnum, Controller, CD Baby
THE SOLUTION
A complete approach to chargebacks.
When chargebacks and losses totaled over $26,000 in a single month, CD Baby knew they had to get fraud under control. After implementing Kount, chargeback activity immediately dropped.
Before Kount, a dedicated team member spent hours trying to contain fraud — constantly creating new rules that fraudsters found ways to bypass. But with Kount, that manual labor nearly disappeared.
THE RESULTS
Less fraud. Minimal chargebacks.
After implementing Kount, CD Baby’s chargeback rates dropped from 2.6% to less than 0.1% — eliminating risk of enrollment in a chargeback monitoring program. Meanwhile, revenue held steady, with no complaints from legitimate customers of orders being rejected.
And the best part is that manual reviews dropped dramatically. No longer does one team member spend hours and hours managing fraud.
Kount makes things so much faster and easier. For instance, I can quickly implement special rules when we’re having a new artist recruitment drive in order to maximize sign ups. Kount has made my life infinitely easier. I’m back to doing my job instead of spending my entire work week battling fraud.
— Christine Barnum, Controller, CD Baby
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