Over the course of the past year, we've successfully executed digital delivery campaigns on behalf of Starbucks, Spotify, Panera Bread, Hulu, Pandora One, and Uber. These are some of our most popular items and each time we launch one such campaign, we're inundated with some version of this question: "why does it take (period of time) to deliver a digital gift code?"
The purpose of this post is to share our new digital delivery item policy for 2017 and to explain, in complete detail, why this is a necessary step in our process.
WHY THE DELAY?
The digital delivery space - especially gift codes, gift cards, and coupons - has a collossal problem: fraud. Since these items have a high liquidity value (meaning that they are easy to sell/flip for cash), digital deliveries are common targets for fraudsters.
The most common way that this happens is that an individual comes into possession of a credit card that doesn't belong to them - sometimes it's stolen, sometimes they guess numbers until they hit gold - and they purchase a large amount of digital delivery items. These "carders" then immediately sell the items on a secondary market for cash.
When the original cardholder realizes what has happened, they call their bank or credit card company and file a chargeback. 2-3 weeks later, our payment processor reverses the transaction and investigates the matter which almost always results in the company losing the funds that they had sold in the first place.
This means that the fraudster gets away with the amount they were able to liquidate the goods for, the original cardholder gets their money returned to them, and the merchant is left eating the cost of the damage done. This is commonly referred to as carding. We don't like this, and our payment processor doesn't like it either, as it impacts their ability to do their job.
OUR STANDARD PRACTICE, EXPLAINED
In addition to technology-based safeguards to prevent high-risk transactions from happening, we have instituted a fulfillment process designed to make it difficult for fraudsters to pull off a carding attack.
The simple answer is to delay the delivery of all orders for new customers by 2-4 weeks. This way, if a digital delivery item is purchased with a stolen credit card, we will likely know before the code is delivered.
If you are an existing or previous customer, you may request a manual review by e-mailing email@example.com. In some cases, we may be able to issue digital delivery items ahead of schedule for such customers.
As always, we are happy to address any specific concerns or questions that you may have about these campaigns. Contact us on Twitter (@thebenjaminapp) or via e-mail at firstname.lastname@example.org.