If you are an online retailer, your world just changed in a big way.

In a narrow 5-4 decision, the United States Supreme Court recently ruled that states now have a right to force out-of-state business to collect and pay sales taxes on sales to their customers. This means that if you do business nationally, you may soon be responsible for sales taxes in any state where you have customers. This article is a guide to how this new ruling may affect you, and what you can do about it.

Online sales tax collection: How we got here

First, let’s start with a little history.

Until recently, out-of-state sales taxes were not an issue for many businesses. According to a legal precedent set in 1992 in the Quill Corporation vs. North Dakota case, businesses were not required to collect sales taxes from out-of-state customers, unless you had a physical presence or “nexus” in that state. (Note that this only applied to collecting these taxes: consumers have always technically been responsible for paying them, albeit with a sketchy patchwork of enforcement.)

This latest Supreme Court ruling in Wayfair vs. South Dakota overturns this precedent, on the grounds that it no longer reflects the economic reality of today’s massive online retailing environment. Quarterly retail e-commerce sales have grown nearly fourfold over the last decade to just under US $125 billion per quarter in Q1 2018 (and a record $452 billion annually in 2017), while annual sales are projected to nearly double to US $638 billion between 2016 and 2022 – on the order of 20% of total retail sales.

These figures represent a lot of tax revenue for states to leave on the table, and few states want to see these revenues decline every year. And in recent years, 31 states have found loopholes for collecting these taxes anyway, by either tightening the definition of “nexus” (for example, paying commissions to referral websites in that state) or requiring documentation and reporting of large purchases. But now, the Supreme Court has cleared the way for any state to simply require sales tax collection.

How this ruling will affect your business

So what will the impact of this ruling be on you and your business? The answer is, “it depends.”

For now, everyone is waiting to see how states will respond to this new ruling. New legislation will take time to be crafted and approved. And small business may catch a break: for example, in the case at hand before the Supreme Court, South Dakota only required sales tax collection for sales volumes in excess of $100,000 or 200 transactions per year. But given how 40 states had petitioned the Supreme Court to rule in favor of this – and bricks-and-mortar businesses have railed against the unfair tax advantages of online sales – it is a safe bet that more sales tax collection with be in the future of many businesses.

Another wild card will be how states treat tax rates for out-of-state purchases. Inc Magazine points out that there are currently close to 10,000 separate taxing jurisdictions in the United States, giving one example of how sales in Chicago require the collection of four distinct taxes – a city tax, county tax, state tax, and an additional “special” tax. States may mandate the use of the same tax levies as in-state purchases, although there have also been calls to simplify out-of-state sales tax rates.

Automation to the rescue

Needless to say, this ruling promises to increase the costs and complexity of selling products across state lines. But for most businesses, the rational choice is to automate the computation of sales tax rates. Service Objects’ DOTS FastTax service provides real-time sales tax data based on your customer’s contact information. Synchronized with tax authorities nationwide, FastTax integrates address validation and geolocation to guarantee accuracy, in a world where tax rates can very from street to street.

We can’t stop the evolution of retail buying patterns and e-commerce. Nor can we control what happens with sales tax policies from here. But we can make both of these things much less frustrating, with solutions that integrate directly with your CRM or marketing automation software. Contact us today to learn how FastTax can help put much of your tax compliance on autopilot, now and in the future.

Some things are just better together. Like milk and cookies. Or peanut butter and jelly. Or, if you do online sales and marketing, ecommerce platforms and data validation services.

Integrating live, real-time validation services right into your ecommerce platform is easy to do, and gives you a whole host of benefits including promoting sales, preventing fraud and ensuring top-notch customer service and product delivery. This article explores a rich smorgasbord of benefits you can engineer into your own shopping cart platform – adding any of them will make your life easier:

Localize the online shopping experience

Even before a customer has a chance to look at your online store, you can curate its contents based on their location, using IP Address Validation to see where they are coming from. Detect their region or country and customize the language, currency and taxes for your online store to match. Or use their location to offer a ski sale for Colorado and surfboards for Hawaii. Geolocation can also be used to change your product mix to match local regulations and sensibilities. Another use we have seen is presenting customers with the appropriate terms of use and privacy policy based on their location, helping you maintain privacy compliance.

Keep online fraud at bay

Our IP Address Validation tool also lets you detect the location of a visitor to implement additional security rules for high risk countries, such as only allowing certain types of payment or restricting sales to high-fraud destinations. You can also compare the location of the IP address against the billing and shipping address, and flag discrepancies for further review.

Other tools to help reduce online fraud and chargebacks include:

• Using BIN Validation to identify high risk cards like prepaid and gift cards, especially for multi-payment and membership products and services. This tool can also help you compare the issuing bank and country with the billing and shipping location.
• Using Email Validation to flag questionable or fraudulent email addresses.
• Using GeoPhone Plus to match the address for a customer’s phone number against their billing and shipping details.

Finally, our advanced Order Validation tool is a comprehensive and composite service for fraud monitoring, performing multi-function verifications including address validation, BIN validation, reverse phone lookup, email validation, and IP validation. Our proprietary algorithm performs over 200 tests and returns a 0-100 quality score on the overall validity and authenticity of the customer, flagged for pass, review or fail.

Get accurate sales tax information

For customers in the United States and Canada, our FastTax product can provide you with up-to-date sales tax rates, as well as identify the correct tax jurisdiction and boundaries based on location. In some jurisdictions tax rates even vary on different sides of the same street, and we can catch this!

Ensure deliverability

By checking addresses, you can ensure cost-saving delivery rates, avoid returned shipments, and ensure customer satisfaction by getting their order to the right place on time.

Our flagship Address Validation services for the United States, Canada and international addresses validate and correct addresses in real-time to ensure customers have entered a correct (and deliverable) address for the USPS, FedEx and UPS. Our US service is CASS certified and includes Delivery Point Validation (DPV) to verify an address is deliverable, Residential Delivery Indicator (RDI) to identify residential versus business addresses, and SuiteLink (SLK) to add secondary suite information for businesses.

For Canada, we can validate and correct addresses whether they are in English or French, with an output that meets Canada Post standards. For international addresses, we can instantly correct, standardize and append addresses for over 250 countries, adapted to each country’s postal formats and cultural idiosyncrasies. You can also use our address validation tools to create an address suggestion tool that includes validation.

Use the right delivery approach

Another use for US address verification is that it can identify general delivery address (i.e. PO boxes). Some sellers choose not to deliver to PO boxes, present different shipper options, or ask the buyer for a different address. Conversely, it can also detect incorporated areas versus unincorporated areas where the USPS will not deliver, allowing you to create logic that doesn’t present the USPS as a delivery option for these types of addresses.

In addition to improving deliverability, these verifications can also improve your bottom line by keeping more orders in your online shopping cart: a frequent customer complaint is being told that they cannot order from a site because USPS-only verification logic says their address is undeliverable. UPS and FedEx can normally deliver to most US doorsteps, and our capabilities can help you close these sales as well.

Ensure accurate email addresses

Our Email Validation service helps make sure that you capture the correct email address at the time of entry, ensuring that all future communications reach the customer. It catches common typographical errors (like gmial.com instead of gmail.com) as well as bogus email addresses. And when accounts are created using the customer’s email address as the primary key or account id, this tool helps ensure that you can catch mistakes while they are still easy to correct.

Improve your customer service and marketing

The benefits of integrated data validation don’t stop when an order goes out the door. Regular validation and cleaning of your contact data, for customers and prospects, will streamline your future marketing efforts – not to mention helping you comply with consumer protection and privacy regulations. And our customer insight and demographics tools can help you leverage this contact data as a valuable asset for serving your customer base even better.

For each of these capabilities, it is easy to integrate our services into almost any ecommerce platform. Most of these systems offer a plugin, RESTful API, or exposed interface to integrate with our services, including cloud connectors and web hooks, and any application that can call a web service can obtain output from our services in either XML or JSON formats. And we recognize that not all shopping carts are built alike, with needs varying from mom-and-pop online stores to full-scale enterprise level platforms, so take advantage of our extensive documentation and support to get you going.

Of course, our tools also stand alone, with convenient batch processing options for cleaning up legacy data in list form as well as quick lookup capabilities. But if you have an automated solution for your ecommerce capabilities, our services can power up the accuracy, quality and productivity of your marketing and sales efforts. Learn more on our website, or contact us anytime to learn more!

Do we support your ecommerce system? Yes we do!

Here is a list of many of the popular ecommerce systems that we interface with.

2Checkout (formerly Avangate)	LemonStand	Spark Pay
3D Cart	Magento (recently acquired by Adobe)	Squarespace
Big Cartel	Microsoft Commerce Server	SuiteCommerce
BigCommerce	Miva	Symphony Commerce
CloudCraze	OpenCart	Systum
CommerceHub	Oracle Commerce Cloud	Volusion
Demandware	osCommerce	VTEX
Drupal Commerce	Paddle	WebSphere Commerce (WCS) (IBM)
Ecwid	Prestashop	Weebly
FastSpring	Salesforce Commerce Cloud	Wix
InfusionSoft	SAP Hybris Commerce	WooCommerce (WordPress plugin)
Kibo	Shopify	X-Cart

And new interfaces are coming online all the time, so if you don’t see yours on the list, talk to us!

 

 

What is one of the biggest growth industries in the United States today? Hint: It isn’t something most of you would want your kids to major in at school, unless you want them to go to the state pen instead of Penn State – because this rapidly growing industry is online fraud.

The Costs of eCommerce Fraud Are Staggering

Estimates vary, but recent figures from DigitalCommerce360 project the value of eCommerce fraud nearly doubling from US $10 billion to $19 billion between 2014 and 2018, as the eCommerce market continues to grow from a historic peak of US $2.3 trillion in 2017. One particular area of fraud, account takeovers, jumped 45% in Q2 of 2017 alone according to the Global Fraud Index, and these fraudulent pirated accounts represent one of the top three types of online retail fraud.

A subtle but equally important issue is what the fear of online fraud costs you and your business. According to a recent fraud benchmarking survey from CyberSource:

• Domestic and cross-border orders have exactly the same rates of fraud among companies surveyed – just under 1% – however nearly twice as many cross-border orders get rejected, costing valuable revenue as well as damaging customer relationships.
• The costs of manual transaction review are one of the major financial consequences of online fraud. Nearly 80% of companies conduct manual reviews, impacting an average 25% of their transactions – and yet nearly 90% of these transactions are ultimately accepted.
• The costs of manual review hits smaller companies particularly hard, where companies under US $5M in annual revenue review nearly six times the percentage of transactions (47%) as companies greater than $100M (8%).

The uptake of all of this? Guarding against eCommerce fraud is really a two-pronged effort: reducing online fraud itself, and reducing the revenue lost to the indirect costs of fraud. For both of these issues, the key is implementing effective automated solutions.

Technology Plays a Key Role in Preventing Online Fraud

According to the CyberSource survey, companies themselves rate three technologies among their top weapons against fraud:

Address verification: making sure an address is real, valid, and corresponds with the person making the order

Credit card number verification: making sure a credit card is legitimate and properly owned

Fraud scoring models: coming up with a quantitative score based on multifactor analysis

Other tools fall into the category of leveraging existing customer data, such as credit history checks, customer order history, or two-factor phone authentication using previous device information on file.

Cyber-fraud is growing explosively nowadays because the market for it gets more lucrative every year, and combating it requires tools that keep you one step ahead of the fraudsters. Service Objects’ fraud prevention capabilities have the advantage of leveraging authoritative up-to-the-minute third-party data, such as USPS CASS Certified® address validation capabilities, global address validation that verifies and corrects international mailing addresses to the unique requirements of each country’s postal address formats and cultural idiosyncrasies, and IP validation that helps you ensure that the origin of an online order correlates with billing and shipping locations. In addition, we offer lead and order validation capabilities using multi-function verifications that give you a quantitative quality score you can use to automate your order processing decisions.

We offer a free consultation to help you determine what tools can help protect your revenue stream. Contact us today to learn what we can do for you.

“Online retailers of all sizes are constantly under attack by sophisticated fraudsters. In fact, credit card fraud costs US online retailers an estimated $3.9 billion each year.” – Geoff Grow, Founder and CEO, Service Objects

At Service Objects, we know that data quality excellence is the key to helping retailers feel confident about improving delivery rates while reducing fraud associated with vacant addresses, PO boxes and commercial mail handlers. This, in turn, helps maintain higher customer satisfaction ratings among your legitimate customers.

This video, featuring Service Objects’ Founder and CEO, Geoff Grow, will show you tools you can use to improve the deliverability of your products and combat fraud. You will learn how to validate addresses against current USPS certified address data to prevent undeliverable and lost shipments, as well as how to validate a customer’s IP address against the billing and shipping information they provide, using data from over many authoritative data sources to stop fraud before it happens.

 

Christmas is, of course, a major religious holiday celebrated around the world. And also one of the busiest and most profitable times of year for your business. But do you know how it first got that way?

Many people credit author Charles Dickens and his story A Christmas Carol with helping Victorian England, and later the world, see Christmas as a time of gift-giving and family connection. His mid-1800s story focused on how a lonely miser, Ebenezer Scrooge, learned to avoid the fate of his partner’s eternal torment when the ghosts of Christmas Past, Christmas Present and Christmas Yet to Come taught him to focus on what really matters – other people.

With apologies to Dickens, we feel that the three ghosts of Christmas have a valuable modern-day lesson to teach us about creating a happy holiday season for everyone, in the middle of your biggest crunch time. (Fair warning: it involves data quality.)

• First, the ghost of Christmas Past showed Scrooge what life was like once upon a time at the holidays, when employees were happy and the company took good care of everyone – before Scrooge eventually presided over a joyless, high-pressure workplace. Just like what happens when your own performance pressures put data quality on the back burner, something a recent executive survey showed as being a major concern.
• Next, the ghost of Christmas Present warns Scrooge that unless he changes his priorities, his neglect of others will harm people like the humble Bob Crachit and his ailing son Tiny Tim – much like your business can ruin the holidays for your customers when bad contact data causes service failures.
• Finally, the ghost of Christmas Yet to Come paints a grim picture of a world where Scrooge is dead and no one cares – the same way that people turn away from your business and never return when you don’t deliver what you promise.

What do these lessons have to do with your own holiday rush season? Everything.

You see, most people in most businesses focus on doing their individual jobs, like entering orders or shipping products. But what about the greater mission of making sure that everyone gets what they need from you, particularly at the holidays? Too often, that is someone else’s job. Which means it becomes no one’s job. And service failures, such as packages that never arrive or contact information that isn’t correct, just become a fact of life that gets tolerated by everyone.

The ghosts of Christmas taught Scrooge that he had to learn to care, or face the consequences. The same is true for you and your business at the holidays. And the best way to care for your customers – particularly when things are at their busiest – is to put processes in place that make sure the customer comes first.

At Service Objects, we help the holidays go smoothly with tools that range from simple address validation – fueled by up-to-date real-time data from the United States Postal Service and others – all the way to complete order verification capabilities that authenticate customers and guard against fraud. We can even append information such as phone numbers to your contact data, to help you keep in touch with people, or gain geographic and demographic insight that lets you serve people better in the future. All through automated processes that run seamlessly in your applications environment.

The lesson for Christmas, then and now? Don’t be a Scrooge. And let the holiday season be a time when your business shines for everyone.

Cyber Monday 2017 was a busy day for many online retailers, including Service Objects. We were so busy, in fact, that we processed a record number of contact data validation transactions. Looking at the online shopping stats, we shouldn’t be surprised. According to numbers released by Adobe Insights, shoppers spent 16.8% more in 2017 than on Cyber Monday 2016, setting a new online record of $6.6 billion in sales.  The mobile sales record was also surpassed, reaching $2 billion over a 24-hour period.

So why did Service Objects’ break our own record? Because our contact validation services play a vital role in the online shopping process for many merchants.  We enable retailers to verify that an individual’s contact information is genuine, accurate and up-to-date. In addition, by validating a person’s name, address, phone number, email and device, businesses significantly increase package delivery rates and considerably increase their ability to detect fraudulent transactions.

In fact, some of the largest retailers in the world use Service Objects’ real-time contact validation services. While consumers were busy breaking sales number records on Cyber Monday, Service Objects’ customers processed over a million more transactions on that day than previous years, making it the largest day in our history.

And we see this trend continuing. As online shopping continues to capture a larger percentage of retailers’ overall sales every year, Service Objects will play a vital role in ecommerce by providing the ability for merchants to validate and clean their customer contact data against hundreds of authoritative data sources – all in a blink of an eye. It also doesn’t hurt that we have a 99.999% server uptime guarantee, unlimited no cost technical support and bank grade transaction security.

For more information or to test any one of Service Objects’ 23 contact validation solutions, please visit https://www.serviceobjects.com/products.

Do you sell products online? If you do, you have a great opportunity in front of you. An opportunity to boost revenues, increase market share, and create visibility for your business. Or an equally great opportunity to drive away customers, damage your brand, and lose money to fraud.

This opportunity comes once a year, in the form of the Black Friday and Cyber Monday holiday shopping period. Using figures from Adobe Digital Insights, Fortune Magazine noted that Cyber Monday 2016 was the biggest online shopping day in US history, with sales of $3.45 billion – a jump of 12% from the previous year. The traditional post-Thanksgiving shopping day of Black Friday came in a close second, with $3.34 billion of online sales in 2016, putting it on track to eventually surpass Cyber Monday as shopping channels continue to blur.

The good news is that both Black Friday and Cyber Monday each represent more than three times the volume of a normal online shopping day. And beyond sheer sales volume, these holidays traditionally draw new or annual shoppers online – people who are openly searching with an intent to purchase, with a great opportunity to discover your brand and become long-term customers.

Unfortunately, it is also open season for fraudsters. Online e-commerce fraud increases sharply during the holiday season, with fraudulent transaction rates reaching a peak of 2.5% versus a normal rate of 1.6%, against an average transaction value in excess of $200. The rise of chip-enabled cards has pushed even more fraudulent activity online in recent years, with online fraud attempts rising by 31% between 2015 and 2016. And there are risks associated with your legitimate customers as well, where problems such as missed deliveries or incorrect contact information can lead to problems ranging from lost business to poor social media reviews – particularly in the spotlight of the holidays.

Here is a quick guide to making the most of your customer opportunities this holiday season:

Screen out the bad guys. Prevent fraudulent transactions by using multi-function order verification to check for things such as address validation, BIN validation, reverse phone lookup, email validation, and IP validation, returning a measure of order quality from 0 to 100 that you can use to flag potential problem orders before they ship.

Execute orders correctly. Use address validation to verify and correct shipping information against up-to-date USPS, Canada Post or international address data, to ensure every order goes to the right place on schedule.

Keep your contact data working for you. Did you know that 70% of contact data changes every year? Validating and correcting this data every time you use it in a campaign preserves this valuable contact information as a business asset.

Target your marketing. Validate the legitimacy of your marketing leads, and check for appropriate demographics such as income and geographic location, to make your outreach for the holidays as efficient as possible.

Thankfully automated data quality solutions that can be engineered right in your API, or run as convenient batch processes with your existing data, can make optimizing the value of your contact data a simple and cost-effective process. And in the process, make Black Friday and Cyber Monday a little less scary – and a lot more profitable.

Customer Service Above All.  It is one of our core values here at Service Objects.  Recently, we’ve received several requests for a list of the unique zip codes throughout the US and Canada.  By leveraging our existing services, we’ve made this happen.  We are now offering both the US and Canada list as a free downloadable resource.

So why is Service Objects providing this data? Our goal is to provide the best data cleansing solutions possible for our clients. Part of this means using our existing data to provide our users with the data they need. While other data providers might charge for this type of information, we’ve decided to make it freely available for anyone’s use. These files can be used for several purposes, such as pre-populating a list of cities and states for a form where a user needs to enter address information. The County and State FIPS information is widely used in census and demographic data or could be used to uniquely identify States and counties within a database.  Additionally, the given time zone information can be used to determine appropriate times to place calls to a customer.

Where to Download

allows you to access a .zip file containing two CSV records.  One CSV contains the US information, the other is for Canada.  The files indicate the month and year the records were created. Toward the middle of each month, the data in each record will be updated to account for any changes in US and Canadian postal codes.

What Other Information is in the Files?

Both files will have postal codes, states (or provinces for Canada) and time zone information.  The Canadian zip code file will be much larger in size with over 800K records. This is due to Canadian Postal Codes generally being much smaller than US Postal codes. Where a US postal code can sometimes encompass multiple cities or counties, a Canadian postal code can be the size of a couple city blocks or in some cases a single high-rise building.

The US file has information for all United States postal codes including its territories. This file will also include the county that the zip code lies in. There will be County and State FIPS numbers for each of the records to help with processing that information as well.  The US file will be considerably smaller than the Canadian file at only 41K records.

In making these files freely accessible, our hope is to make the integration and business logic easier for our users. If you’d like to discuss your particular contact data validation needs, feel free to contact us!

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.