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Resource Type: Case Studies

Reducing Online Fraud: Dermstore x THG Ingenuity

Dermstore, a leading skincare brand, recovered £1.5 million in revenue in just six months with THG Ingenuity's fraud detection solution.


reduction in fraud check delays


reduction in chargeback rate


reduction in false positive rejection rate

March 9, 2022

Dermstore is a skincare and beauty ecommerce site headquartered in the US. The brand was acquired by THG in January 2021 and migrated onto the THG Ingenuity platform in July 2021. Dermstore sells over 350 different brands to customers around the world. Dermstore focuses on providing the highest quality products and straight-from-the-experts information to guide consumers through their skincare journey.

Since Dermstore went live in early 2021 using THG Ingenuity's proprietary fraud detection solution, the brand has been able to:

  • Recoup lost revenue.
  • Reduce online fraud.
  • Enable their customers to transact with confidence.

Challenges facing Dermstore pre-migration

  • A high chargeback rate of 3%.
  • A previous fraud tool that was outdated and inefficient.
  • A high number of rejected orders due to false positive declines.

Dermstore recognized that online fraud was a critical obstacle it had to overcome to scale and evolve its ecommerce offering.

£1.5M recouped in revenue

Since leveraging THG Ingenuity's fraud detection solution, Dermstore has recouped approximately £1.5 million in revenue, and drastically improved the check-out experience for its customers. To achieve this, the brand focused on three key areas:

  • Improving order flow by reducing manual review and enhancing order automation.
  • Reducing their overall chargebacks and avoiding excessive chargeback monitoring programs fines from Visa & Worldpay.
  • Reducing the percentage of false positives.
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63.8% reduction in fraud check delays

Prior to migration, on any given month, Dermstore’s referral rate of 9.24% caused a delay in fraud checks because an order would be waiting in the queue for on average 29 hours before an analyst could manually review it and make an informed decision.  

This caused a 68% decrease in the number of orders requiring manual review, which cut down the time an order was being held in the queue from 29 hours all the way down to 10. 

As a result, this enabled the business to release its order shipments to consumers at a much faster pace. With fewer order flows interrupted and more transactions being approved, Dermstore recorded a substantial improvement in customer retention and customer satisfaction.

96.6% reduction in chargeback rate

During the peak of the 2020 holiday period, Dermstore was hit with a spike in chargebacks.  

After migrating to the THG Ingenuity platform in early 2021, Dermstore’s chargeback rate reduced from 3% in December to an all-time low of 0.1% by April 2021.

81.5% reduction in false positive rejection rate

False positives are notoriously known as the “Silent Revenue Killer”. Clients using our fraud detection solution typically have very low false positive rates and by deploying the solution, Dermstore’s false positive rate rejection rate of 34% was cut down to single digits.

Given the large volumes that needed to be processed, Dermstore was able to leverage the platform's advanced capabilities in making more accurate decisions.

As a result, Dermstore’s false positive rejection rate was successfully reduced from 34% down to 6.3%, subsequently causing a considerable increase in revenues for the brand. 

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