Hak5 Case Study

Hak5 is hacking fraud.

55%

Fewer chargebacks

1 hour

Integration time

40%

Decrease in decline rate

The Company

Darren Kitchen developed an affinity for coding as an 8 yr-old boy on a computer that was two years his senior. At the age of 22, Kitchen founded Hak5, a cybersecurity company, in a  townhouse in Williamsburg, VA. What began as a 24/7 live-streaming, podcasting, DIY video hacking series, way before Twitch existed, quickly found commercial success once their online store was founded. The company now boasts YouTube’s longest running channel with almost a million subscribers, offers an award winning podcast, and an inclusive cybersecurity (a.k.a hacker) community. The Hak5 online store sells leading pentest gear, hardware and software that aids individuals and businesses to identify security vulnerabilities that can be exploited, to preemptively secure their IT systems. 

The Fraud Problem

After fielding endless requests from Hak5 fans, seeking purchasing opportunities of products that were discussed or created for Hak5 video podcasts, Darren Kitchen, Founder and CEO of Hak5, finally decided to commercialize the company. Starting with a few bespoke,  made-to-order items in his living room, the business quickly ballooned into multiple product lines sourced in various countries and a 5000 sqft warehouse in California. The logistical nightmare of scaling the rapidly growing company quickly overwhelmed Mr. Kitchen. 

The category of tasks that took up the most resources with the least amount of return was the battle against fraud. Being burned early on with high value fraudulent orders, Darren knew he could not ship out orders without reviewing them for fraud, and took upon himself the responsibility of fraud prevention. There were several pain points Darren was facing. The most pressing stemmed from false declines. In an effort to reduce fraud chargebacks, Darren implemented rigid rules, such as not shipping to any address other than the billing address, that caused many legitimate customers to be declined. Equally damaging was the negative reaction to Hak5 efforts to obtain verifying data in its fraud prevention efforts, such as requesting images of ID or proof of physical possession of the credit card being used. Furthermore, being enormous proponents of online privacy and cybersecurity, Hak5 virtually trains their fans on how to use proxies and mask their identities, resulting in a significant portion of their customer base having an online appearance eerily similar to that of a fraudster’s or scammer’s and made fraud detection much more difficult.  

Darren, who makes a habit of applying the 80/20 rule to everything, knew unequivocally that spending endless hours manually reviewing orders was highly inefficient, and that a fully automated solution was imperative.   

The First Attempt

Hak5 opted to use Signifyd to automate fraud prevention. At first the solution seemed to weed out fraud well enough to deem the partnership a success, but that assessment did not last. After 2 years of service, Kitchen became concerned with the lower than expected approval rates that the Signifyd system produced. When he tried to decipher the logic behind the algorithm’s decisions, he was met with esoteric acronyms and an unresponsive Signifyd team. Disgruntled customers were reaching out, perturbed by their declined orders, and the Signifyd solution did not allow Hak5 any recourse in resolving the mistaken classification. The system lacked flexibility and a merchant controlled ‘Block List’ and ‘Allow List’ that could override a Signifyd decline. The problem got so bad that Darren found himself devising ways to “trick” the Signifyd system to allow those orders to go through. The solution was causing more problems than it was solving and Darren realized it was time to look for a better solution.

Finding NoFraud

The search for an effective solution took Darren to the Shopify App Store where he began with reading Signifyd’s customer reviews. He figured he couldn’t be the only one struggling with the system, and he was right. His experience and sentiments were reflected in the feedback of many frustrated Signifyd customers. 

His next step was to peruse the Shopify business profiles and app reviews of the other players and services in the fraud prevention space. NoFraud easily emerged as the frontrunning candidate meeting all of Hak5’s requirements:  NoFraud was fully automated, yet still allowed for merchant involvement. The solution provided merchant maintained ‘Block/Allow’ lists, and the reviews of NoFraud customers all reported a high level of responsiveness and collaboration from the NoFraud team. Additionally, there were several 5 star reviews from former Signifyd customers, which solidified Darren’s decision to try NoFraud’s solution.  

Integrating With NoFraud

The largest obstacle to switching from Signifyd to another solution was the fear of the cost of transferring from one system to the other. Being intimately familiar with all things computer and technology related, the Hak5 team anticipated that an architectural change in the eCommerce machine would carry a heavy price tag in terms of lost or delayed orders during the transition. 

However, their fears were entirely for naught. The entire integration took less than one hour. What they presumed would involve multiple departments and a lengthy back and forth procedure, involved just one engineer and a salesperson who guided them through all the code changes, API changes, and private app updates over the phone.  

Darren describes the relief he felt watching that very first order sail smoothly right through the Shopify and NoFraud systems. The order was approved and payment was captured almost instantly. 

The NoFraud Difference

The usability and transparency of the NoFraud system gives Hak5 the confidence that the system is making the correct decisions. When needed, Hak5 has control over orders and can make individual decisions, such as ‘always allow’ or ‘never allow,’ and they can even accept phone orders. Their decline rates have declined 40%, bumping up their approval rate from 93% to 95%, chargebacks have decreased 55%, and legitimate customer declines have all but disappeared.

“The difference between Signifyd and NoFraud is akin to the difference between day and night. NoFraud understands how businesses operate, it is obvious that they have worked with eCommerce businesses of this size, they are familiar with the pain points eCommerce merchants face and they care about our success. I can easily see how managing fraud manually and poorly could literally bankrupt a company going through exponential growth. I am relieved and grateful to have partnered with NoFraud.”

Darren Kitchen

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Customer Testimonials

Praise From Some of Our
Successful Customers

“5 stars across the board! We switched to NoFraud a year ago and not only did my approval rate increase drastically but pricing was also a lot more competitive. The integration is seamless and literally worked out of the box with zero changes to our current workflow.”
“NoFraud has been absolutely amazing. Before NoFraud, we were suffering from a barrage of fraud attempts, which resulted in tens of thousands of dollars of chargebacks. Once you install this app, fraudsters will give up hope. I think it’s a no-brainer.”
“Implementing NoFraud has vastly improved our business operations, not only by significantly reducing chargebacks and false positives, but by turning our inefficient fraud prevention process into a simple pass/fail decision that saves us loads of time and stress.”
“This is some of the best money we have ever spent. Integrating the app was quick and smooth, the support is fantastic and far superior to the service offered by some of their competitors. Our fraudulent orders have dropped by almost 60% since integrating NoFraud as compared to Signifyd and all orders that are charged-back are quickly reimbursed.”
“I switched to NoFraud from another guaranteed fraud prevention provider. My approval rate improved, pricing was more competitive, NoFraud customer support is superb and the user interface is intuitive and informative. My only regret is that I did not make the change sooner.”
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“Normally not one to write reviews but absolutely must applaud NoFraud. I switched over from a big name competitor that dropped the ball huge on support. I’ve had no such issues with NoFraud — their support agents has been super responsive. The sales folks answered my every detailed question — even digging into API documentation. Their onboarding team was top notch. I was up and running super quick! Very happy.”
“The NoFraud app is really easy to install and set up. NoFraud’s analysis has been much more effective than the standard default Shopify fraud analysis. It catches fraud missed by Shopify and passes orders that Shopify said were high risk. Best part is, you can contact NoFraud and speak with someone.”
“The team at NoFraud are amazing. They have been a strong partner against the fraudsters. Right before we signed up we were hit with several thousand dollars of Mule Fraud. The addition of this app has definitely saved us money. Worth every penny. I would totally recommend them.”
“We can’t say enough wonderful things about the team at NoFraud. They are extremely responsive, knowledgeable, and easy to work with. The peace of mind we get from knowing that they are handling the fraud check process is invaluable. NoFraud’s system consistently delivers accurate order ratings and recommendations.”
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“NoFraud has been fantastic. We switched from Signifyd and haven’t looked back. Better rates, vastly simpler customer service, easier touch points for service/help, chargeback protection and filing on our behalf (this was huge — of the few chargebacks we’ve gotten, NoFraud takes care of them and we’re good to go!). Super fast verifications (if/when needed). Great staff. All in all, definitely recommend going with this app!”
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“Excellent communication. Easy to use service. Available to resolve and questions or concerns that arise in a timely manner.”
“NoFraud’s ability to extend internationally is great since we have no experience or knowledge in international sales. Without NoFraud, we’d have to learn everything there is to know about fraud detection in another market.”

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Ready to learn more?

Book a demo and see our accurate real-time fraud screening for eCommerce in action.