What is DOTS FastTax?

DOTS FastTax web service provides sales and use tax rate information for all US areas based on several different inputs. The operations that are offered within FastTax take input parameters such as address, city, state, postal code. The service also provides an operation that will take your Canadian province and will return the proper Canadian tax rate information.

How can it be used?

At its core, FastTax is an address to tax rate lookup system. You provide the service with a location and it will return the tax rate or rates for the given area. From there you can use this data in conjunction with your own business logic to easily determine the proper tax rate you should be charging. A common use case is for online retail companies that need to determine the rate to charge for an order. Rates vary greatly depending on where the client is located and if the company has a sales tax nexus in that state.  Nexus, also known as sufficient physical presence, is a legal term that refers to the requirement for companies doing business in a state to collect and pay tax on sales in that state. Calculating the proper rate is as easy as determining where your company has nexuses and then performing a tax rate look up via the FastTax web service. These two steps can be done programmatically, thus streamlining your business workflow.

What makes FastTax so powerful?

It may seem like a simple task to take an address and perform a lookup on a tax rate database. In theory it is just identifying a location and then finding the relevant tax rates for it. However, in reality there are many more factors that need to be accounted for to ensure the tax rate being returned is accurate, up to date, and truly relevant for the input address. It is in these aspects where Service Objects’ FastTax goes above and beyond. On top of our tax rate databases that are actively maintained to provide the latest and most accurate tax rate data, our operations benefit from the other services we specialize in. Namely, our address validation and address geocoding services.

How does FastTax go above and beyond?

Through the use of our address validation engine we are able to take an input address and determine its correctness as well as standardize it into its most useable form. Having an address corrected and standardized allows us to more accurately match the location with its corresponding tax rate. On top of address validation, our use of geocoordinates and spatial data allow us to identify boundaries between areas. This could be the difference between charging the proper rate for an area or misidentifying it and missing rates such as county, country district, city district, or even special district rates. Another extremely important distinction that geocoordinates allow us to make is for areas that are unincorporated. FastTax provides an “IsUnincorporated” flag when an address is in an unincorporated area. This allows for your business logic to correctly tax this address by removing any city or city district rates.

FastTax in action

To see the power of FastTax in action it helps to take a look at Google Maps. Let’s take the city of Littleton, Colorado. In fig.1 the city perimeter is outlined in red and its contents shaded in. The Google Maps result shows the officially recognized city limits. Comparing that to the pin shown in fig.2 it is clear that the address in this example falls beyond the city limits. Technically it is identified as part of the city of Littleton but is part of an unincorporated area. Tax rates for this address need to properly account for this geospatial and city boundary information. FastTax excels in identifying these areas and can provide the “IsUnidentified” flag to indicate this address falls into its own special case. With the indicator flag in hand you can properly account for the difference in tax rates.

See how FastTax can help your business. Sign up for your free trial key or send us a list and test up to 500 transactions.

Here at Service Objects, we strive to improve our services to best meet our customers’ needs. Sometimes that means adding additional features and upgrades, tweaking an existing service and/or operation, leveraging new datasets, or adding an entirely new service. We take pride on being able to quickly and effectively respond to our customers’ feedback and requests.

Part of this response to client feedback has led us to develop a new operation upgrade for our DOTS BIN Validation service. It is called ValidateBIN_V2. This new feature represents the latest and greatest that our BIN Validation service has to offer.

DOTS BIN Validation service is used to help determine if a certain BIN (the first 6 digits of a credit card number) is valid or not — a crucial step in fighting fraud. BIN validation also helps merchants determine if a credit card number is for a debit card, credit card, gift card, or prepaid card. Likewise, the BIN number will identify the country of origin for the card, providing you with insight as to the validity of the transaction.

This new BIN operation upgrade builds on the previous operation, providing even further information about a BIN.

By design, and to ensure that we’re giving our customers quality information, the V1 BIN operation returns information about a BIN only if bank information can be found about it.

The ValidateBIN_V2 operation provides the same information as the V1 operation, but also functions slightly differently and provides additional information:

• Instead of failing a BIN or providing an error response, ValidateBIN_V2 displays any information about a BIN that we can find.
• The V2 operation upgrade will return a “Status” field indicating “OK” for BINs we were able to find or “Not Found” for BINs that we weren’t able to find or that don’t exist.
• The V2 operation will return the same card type, sub type, bank, and country information that the old operation returned.

We’ve also added a few new fields to the new BIN operation that make it more helpful to the end user:

• Warnings — This field returns warning codes and accompanying descriptions about those warnings. The current service will only return warnings if the bank information, card type or country information is missing for a BIN.
• Notes— This field contains additional information. Based on the way we have set these fields up in our API, we can easily add new warnings and notes as we continue to improve our services.  These fields allow us to return useful information about a BIN without affecting the current output structure of the API.
• Information Components — This field is set up in a way that allows us to future proof the ValidateBIN_V2 operation. If we need to add new fields, the Information Components field allows us to easily do so without altering the existing structure of the API.

If you are interested in testing our BIN Validation API, sign up for a free trial key today!

Dating experts will tell you that people have more problems committing than ever before. And nowhere is this more evident than in your online shopping cart. According to Barriliance, a vendor of online shopping cart optimization tools, over three-quarters of people abandoned their carts in 2016, with specific figures ranging from 73% on desktops to over 85% on mobile phones.

Cart abandonment sounds like a term straight out of family therapy, but in reality it provides an important window on consumer behavior. Some factors for bailing out on a purchase may be unavoidable – for example, customers may window-shop on their phones to purchase something later, or become reluctant to purchase when they see high shipping charges or additional fees. But other factors are within your control, and these often revolve around data quality issues.

Here are some of the big ones:

Too much data entry. Your customer sees 20 ‘required’ fields to be completed to check out.  Instead, they abandon the cart due to too much ‘form friction’. For greater conversion, we want to reduce the amount of friction wherever possible to promote a fast and accurate checkout process. Autocomplete tools can help lessen the friction, and are generally considered accurate, as they are based on the individuals’ contact information. Whereas, address-suggestors should be used with caution, as they can present the user with multiple address matches close to their own.  This significantly increases the risk of the user accidentally selecting an incorrect but real address. This can also create increased confusion when credit card authorization fails due to mismatched address, further increasing cart abandonment. Regardless of the tool, Address validation should always take place after the customer uses autocomplete and/or address-suggestor, to reduce the risk that a wrong – but valid and deliverable – address gets used.

Computer literacy. Often your richest target markets struggle the most with ordering things online – and too often, throw up their hands if there are too many hardships to placing an order. This means that cart recovery often revolves around being able to reach out to a customer and help them complete the order.

By using phone validation and email validation tools, you can help ensure correct contact data is captured in the event that you need to call or email customers about incomplete orders, and hopefully convert some of these into completed ones. These contacts are generally very effective: for example, Business Insider cites figures from marketing automation firm Listrak showing that 40% of follow-up cart recovery emails are opened if sent within three hours.

Payment information. When people pay by credit card online, they are usually entering 16-20 digits, and typos and bad information can quickly kill valid orders. A Luhn check, a real-time, simple checksum formula designed to distinguish valid numbers from mistyped or otherwise incorrect numbers, can help ensure the credit card number entered at least meets the basic criteria.  You can also check the Bank identification number (BIN) to ensure correct credit card numbers, that have passed that Luhn algorithm, are legitimately issued by financial institutions even before trying to process the actual charge.  This provides the opportunity to engage the customer at the time of entry and allow for corrections.  As a bonus, BIN validation also helps screen out fraudulent payment information before you process the order and/or ship.

Keep It Simple. The design, layout and even language used for your cart make a difference too. Kissmetrics notes that buyers can be turned off by faux pas ranging from bad design, making people create an account, or the process is too complicated.  A simple, clean step-by-step guide can provide confidence for your shopper and increase your conversion rates as well.  When there is an error, do not overlook the power of strong and informative error messaging.  For example, if email validation returns a specific error, let the customer know the precise nature of the error and provide suggestions on how to fix it. A generic ‘error’ message is not enough.

Finally, there is one kind of cart that always should be left behind: people who are trying to place fraudulent orders. You can use bundled tools such as lead and order validation to perform real-time multi-point contact validation on US, Canadian and International leads, comparing data such as name, company, address, phone, email and device against hundreds of authoritative data sources. The results provide both an individual quality score for each data point and a composite quality score (0-100), to ensure that you are working with genuine and accurate leads.

Online order entry truly is a bit like dating. We can’t make everyone fall in love with us, or guarantee that they will make it all the way to the altar. But with the right kinds of tools, including building in data quality safeguards at the API level, we can boost our chances of success substantially. And that is something every online merchant can be in love with.

In today’s era of online ecommerce, international sales represent a huge potential market for US vendors. According to research firm eMarketer, international sales represent three-quarters of a nearly US $2 trillion retail ecommerce market, nearly half of which comes from China alone. And much of this vast market is only a click away.

On the other hand, cross-border sales remain one of the greatest risks for fraud, with a rate that was more than twice that of domestic fraud through 2012, and despite recent improvements in data quality technology this rate is still 28% higher as of 2015. And one digital commerce site notes that while retailers are making progress at managing fraudulent transaction rates, they are doing so at the expense of turning away good customers – people who, in turn, may never patronize these sites again.

So how do you exploit a rich and growing potential market while mitigating your risk for fraud? The answer might surprise you. While nearly everyone preaches the importance of a fraud protection strategy for ecommerce, and suggestions abound in areas that range from credit card verification to IP geolocation, the head of ecommerce at industry giant LexisNexis points to one area above all: address verification.

In a recent interview with Multichannel Merchant, LexisNexis ecommerce chief Aaron Press points out that the biggest problem with international addresses is a lack of addressing standards between countries. “Postal codes have different formats, where you put the number, how the street is formatted. Normalizing all of that down to a set of parameters that can be published on an API is a huge challenge.”

This means that you need robust capabilities in any third-party solution that you choose to help verify international addresses. Some of the key things to look for include:

• How many countries does the vendor support address formats for, and does this list include all of the countries where you do business?
• Can the application handle multiple or nested municipality formats? For example, a customer may list the same location in Brazil correctly as Rio, Rio de Janeiro, Município do Rio de Janeiro – or even the sub-municipality of Guanabara Bay.
• Will the application handle different spellings or translations for common areas? In the address above, for example, the country may be spelled as Brazil or Brasil. Likewise, the United Kingdom may also be referred to as England, British Isles, Karalyste, Birtaniya, United Kingdom of Great Britain and Northern Ireland, or even 英国 (Chinese for the United Kingdom, literally “England Kingdom”).
• Can these capabilities can be implemented as an API within your ordering application? Or can it process addresses externally through batch processing?

In general, cross-border fraud prevention requires a multi-pronged effort involving all of the potential stress points in an international transaction, including international address verification, email validation, credit card BIN validation, IP address verification – even name validation, so you can flag orders addressed to Vladimir Putin or Homer Simpson. These are clearly capabilities that you outsource to a vendor, unless you happen to be sitting on hundreds of millions of global addresses and their country-specific formats. The good news is that in an era of inexpensive cloud-based applications, strong fraud protection is easily implemented nowadays as part of your normal order processing strategy.

Online commerce is huge nowadays – to the tune of over $400 billion dollars a year in the United States alone in 2017, at a growth rate up to three times that of retail in general. Barriers to entry are lower than ever, ecommerce platforms have become simpler to use and less expensive than ever, and the convenience of e-commerce has grown to encompass businesses of every size. Above all, purchasing goods online has become ubiquitous among today’s consumers.

Whether you are looking to launch a simple shopping cart using platforms like WordPress’ WooCommerce, Shopify or Magento, or an enterprise solution like Microsoft’s Commerce Server or IBM’s WebSphere Commerce, it can still be a minefield for the uninitiated. Here are some of the risks that every online seller takes every day:

Fraud. Filling orders from fraudulent sources costs you both revenue and time – and according to Javelin Research, identity fraud alone totals over $18 billion per year in the US. And the bad guys particularly love to target novice sellers.

Fulfillment. Every online order starts a chain of activities – from billing to shipment – that depend on the quality of your contact data. Credit card processing often requires accurate address data, and one misdirected shipment can wipe out the profit margin of many other sales – not to mention the reputational damage it can do.

Marketing. According to the Harvard Business Review, the cost of acquiring a new customer ranges from 5 to 25 times the cost of selling to an existing customer. This means that your contact database is the key to follow-on sales, brand awareness and long-term profitability. Which also means that bad contact data – and the rate at which this contact data decays– cuts straight to your bottom line.

Tax issues. Did you know that tax rates can vary from one side of a street to the other? Or that some states have passed or are considering an “internet tax” out-of-state sellers? Tax compliance, and avoiding the penalties that come with incorrect sales tax rates, is a fact of life for any online business.

The common denominator between each of these issues? Data quality. And thankfully, these problems can all be mitigated inexpensively nowadays, with tools that fit right in with your current contact management strategy. Some of the solutions available today from Service Objects include:

• A suite of tools for fraud prevention, including address, email and telephone verification, lead validation that scores prospects on a scale of 0-100, credit card validation, and IP address validation – so you know when an order for a customer in Utah is placed from Uzbekistan.
• Shipping address validation tools that verify addresses against up-to-date real-time data from the USPS and Canada Post, to make sure your products go to the right place every time.
• Email verification capabilities that perform over 50 tests, including auto-correcting common domain errors and yielding an overall quality score – improving your marketing effectiveness AND preventing your mail servers from being blacklisted.
• Real-time tax rate assessment that validates your addresses, and then provides accurate sales and use tax rates at any jurisdictional level.

Each of these capabilities are available in several convenient formats, ranging from APIs for your applications to batch processing of contact lists. Whichever form you choose, automated data tools can quickly make the most common problems of online commerce a thing of the past.

There are two unavoidable consequences in life: death and taxes. And taxes are far and away the complex of the two, particularly if you are in ecommerce or a business making sales to others. Here are some of the issues you face:

• Tax rates not only vary across municipalities, but by district or even address. For example, in one case in Arizona, one side of a particular street has a different tax rate than the other side!
• Tax rates change constantly. According to CFO Magazine, there were nearly 800 changes to sales and use tax in the US in 2014.
• Once upon a time, your concerns about collecting sales taxes ended at the state border. Not any more. In Colorado, the so-called “Amazon tax” law now compels businesses nationwide to collect sales tax from Colorado purchases. It survived a recent Supreme Court challenge, and other states are now taking similar steps: Amazon.com, for example, now collects sales taxes for deliveries to 32 US states as well as the District of Columbia.

Within a given area, the different tax rates geolocation might be using may include state, city, county, county district and/or city district taxes. The calculation of these rates can become complicated when you add ‘geography’ of the buyer/seller to the mix.  Does the seller live in an unincorporated area? What tax rate(s) do you use for ecommerce? How do you know you are using the correct/current rate?

The consequences of charging incorrect sales taxes are greater than ever. And not just from the authorities, but from John Q. Public. Nowadays anyone can check tax rates on their smartphones, which has led to expensive and embarrassing class-action lawsuits accusing major firms of overcharging on tax. Suits that have reached the court system in recent years include many high-profile plaintiffs including Wal-Mart, Whole Foods, Papa John’s Pizza and Costco.

Meanwhile, state tax authorities have always asserted their authority in the case of tax errors. Since sales and use taxes represent a large portion of state revenue, states often devote dedicated resources to enforcement efforts, and can impose substantial penalties: California, for example, levies a 40 percent penalty on failures to pay sales or use tax. There are also costs associated with preparing for an audit and administering the results of these audits. Even when businesses err on the side of over-collecting sales and use taxes, the aftermath of an audit can involve time, manpower expense and costs associated with refunding sales tax over payments to customers, not to mention the customer service issues associated with the errors.

Given the complexity of sales and use taxes, as well as the sheer volume of tax jurisdictions and annual changes to tax law, automated tools are a must for most businesses – including small business. Given the diversity of these jurisdictions, it is particularly important to use tools that compute these taxes based on geolocation, rather than just coarse metrics such as ZIP codes. This includes geocoding specific addresses, and determining unincorporated areas that may fall outside normal municipal tax boundaries.

The best tax rate tools do the work for you by maintaining and updating sales and use tax databases, and integrating with your processes to determine the geolocation to apply the correct tax rates. For example, Service Objects’ DOTS FastTax takes over the hard work of tax validation and compliance, including accurate sales and use tax computation based on geolocation derived from street addresses as well as postal code information. FastTax then uses this location data to identify tax jurisdictions and eliminate problems associated with different rates in incorporated vs. unincorporated areas.  The tax rates are synchronized with the states and updated in real-time throughout the year.

For geolocation accuracy, FastTax also incorporates Service Objects’ flagship Address Validation capabilities for US and Canadian addresses.  Addresses are accurately resolved to provide a precise tax jurisdiction and total roll-up tax rate.  DOTS FastTax is available in four ways; as a real-time API integration, PC-based list processing, automated FTP-based list processing, and web-based Quick Lookups.

We all work in a challenging and complex environment for sales tax compliance, whose rate of change continues to accelerate. By putting this task in the hands of a good automation partner, you not only reduce your own workload and labor efforts, but protect yourself from the costs, penalties and reputation issues associated with compliance problems. The end result is a process that makes an inevitable part of your sales process a little less taxing.

Colorado is a very difficult state to accurately calculate sales tax in. We estimate there are thousands of tax rates that vary based on location. As with most states, sales tax rates in Colorado are a mix of state, county, city, and special district tax rates. Thus, someone in Denver, Colorado pays a different sales tax rate than someone in Boulder or Fort Collins. To further complicate the sales tax situation in Colorado, some communities also impose a use tax and/or a service fee — and a host of exemptions exist.

Plus, sales tax rates fluctuate all the time. Tax rate changes in several Colorado communities such as Dillon, Johnstown, Grand Lake, Steamboat Springs, and Grand County (too name just a few) will become effective January 1, 2017.

As if all of the above weren’t enough to make calculating sales taxes in Colorado challenging, the U.S. Supreme Court just upheld a controversial law in Colorado that pressures online retailers to collect sales tax in the state. New sales tax rates and the upholding of the so-called “Amazon tax” law might make sales taxes even more difficult for some retailers and/or consumers.

So, what is this Amazon tax and what does it mean to out-of-state retailers? The 2010 law gets its nickname from the online retailer because it compels out-of-state retailers such as online businesses to collect sales taxes on purchases from Colorado residents. Typically, these businesses are exempt from collecting sales taxes in states in which they do not have a sufficient physical presence or “nexus.”

For example, if you run an online business in California with a physical store and a warehouse in the state and sell goods to customers in California, you’d be required to collect sales tax from your Californian customers due to your physical presence. Meanwhile, you would not need to do the same for your customers in other states (unless you have a physical presence in those states). The Colorado law, however, complicates transactions for customers in Colorado.

According to an article in the Denver Post, Colorado’s sales tax law gives “…businesses a tough choice: either collect the sales tax or deal with more red tape, including additional paperwork and the requirement they remind Coloradans that they owe sales tax to the state.”

Colorado’s 2010 tax law was immediately challenged by the Direct Marketing Association (now the Data & Marketing Association), which filed a lawsuit. Now that the Supreme Court has upheld the law, some believe that other states may follow Colorado’s lead and impose their own “Amazon” taxes.

So, for now, Colorado is likely the most challenging sales tax state in the nation, but these challenges could spread to other states. You have a choice when selling to customers in Colorado: navigate the complexities of calculating sales tax in Colorado — a tough task made much easier with Service Objects’ FastTax real-time sales tax API — or comply with Colorado’s use tax notification requirements (for businesses with at least $100,000 in gross annual sales).

Cyber Monday shattered previous online sales records and set a new all-time high, with consumers opening their wallets and spending $3.45 billion, marking a 12.1% jump over last year’s figure and earning its place in retail history.

The data, compiled by Adobe Digital Insights, surpassed initial estimates and dismissed fears that consumer shopping during the Thanksgiving weekend would hurt sales on Cyber Monday, which is historically the busiest day of the year for internet shopping. Adobe’s data measured 80 percent of all online transactions from the top 100 U.S. retailers.

The record-breaking online shopping put retailers’ data quality at the top of their priority list. Many smart retailers turned to Service Objects to help them make informed decisions about their customers, relying on Service Objects to validate over 1 million of their online transactions on Cyber Monday.

An increase in order volume impacts everything from a store’s inventory levels to brand reputation. By implementing data quality solutions like the ones Service Objects offers allows retailers to:

• Greatly reduce the number of fraudulent orders by validating that a consumer is really who they say they are;
• Ensure customers’ orders are delivered to the correct location, heading off customer service nightmares and stopping harmful customer horror stories from going viral on social media;
• Save significant money by eliminating bad or incorrect address data and increase the percentage of successful package deliveries;
• Eliminate the headache of dealing with credit card chargebacks caused by missed shipments; and
• Gain a competitive advantage over the competition and increase customer loyalty.

Using a data quality solution is fundamental to turning your customer data into a strategic asset. Read more about the different business challenges that data quality can solve.

If you’re like most business owners, finding ways to save time and money is one of your top priorities. After all, a penny saved is a penny earned. One area you might not have paid too much attention to is shipping — and it’s prime for cutting costs and hassles. Use the tips below to save both time and money on shipping:

1. Avoid Guesstimating Your Shipping Costs

Chances are, you’ll overpay as you err on the side of caution. For example, your package may weigh less than a pound, yet you might estimate its weight at two or three pounds “just to be safe.” The same is true of a package’s dimensions. Over guesstimating a package’s weight or size could put you in a higher price range than necessary. Meanwhile, underestimating the package’s size or weight could result in time delays as the shipper returns your package for insufficient postage. This is a risky choice as shipping delays translate into unhappy customers (which is why most businesses overestimate their package sizes and shipping costs). Avoid overpaying by using a postage scale and a ruler to accurately weigh and measure your packages.

2. Do Your Research And Choose The Right Service

While one shipping company may have lower rates on smaller parcels, it may be the costlier choice for larger ones. It pays to compare prices. While you’re at it, choose the right type of service for the package. Is overnight service essential or would ground service be acceptable? Would an alternative shipping method, such as Greyhound Package Express or DHL Express, cost less?

3. Increase Sales By Offering Convenient Returns

Though offering to pay for return shipping may seem counterintuitive when you’re trying to cut your shipping costs, you may want to consider adopting such a policy. According to a Forrester Consulting study conducted for UPS, retailers that offer convenient, inexpensive returns are likely to see an increase in sales, customer loyalty, and incremental revenue. 

4. Use Address Validation Software

Are you shipping your packages to the correct address? Address validation can flag you to a potential shipping problem, allowing you to correct the issue before you ship the package and find out the hard, expensive, and time-consuming way. By validating addresses before you ship your packages, you’ll have fewer packages returned to you as undeliverable, fewer upset customers wondering where their packages are, and lower shipping costs as a result. 

5. Shop Around For Shipping Supplies And Buy In Bulk

Are you still buying your mailroom supplies at the local stationary or office supply store? Though convenient, you’re probably paying too much. Again, this comes down to doing your research and shopping around. Buying in bulk also reduces your shipping costs overall. The savings could be substantial.