Get the Details Right — The Score Will Take Care of Itself.

One supervisor cannot watch 10 subordinates, but 10 subordinates can watch one supervisor.

One weekend, I noticed a number of a particular type of purchase on the company I run, Supermart.ng — Nigeria’s largest online supermarket and grocery delivery service. It looked fraudulent. Fraudulent transactions bear certain traits: they come in rapid succession, they contain the most expensive but easily resellable items you are selling (iPhones and MacBooks, Watches, Jewelry, Perfumes etc) and often, they invariably use a credit/debit card issued by an international bank, not a Nigerian one (I will explain why so in a bit). Since Supermart.ng does not do cash on delivery, these orders composing primarily of perfumes (we don’t sell iPhones and MacBooks) had already been paid for using a credit issued by a foreign bank.

I quickly checked to see where liabilities lay in these transactions. It stated clearly that the liability wasn’t ours at Supermart.ng because we had 2nd-factor authentication.

The way card payments work is there is an Issuing Bank, an Acquiring Bank and a Merchant. The issuing bank issues the card to the cardholder, the acquiring bank is the bank of the merchant and there is the payment gateway. 2nd-factor authentication put simply, is a security protocol that ensures that whoever is using the card has 2 passwords to enable them transact with the card. However, any of the 3 actors in the chain can disable it. It can be the issuing bank in order to make it easier for their clients to use their cards, it could be the payment service provide in order to make it faster for people to pay or the acquiring bank/merchant by cutting down the complexity of paying for its service. When any of the parties disables it, it takes responsibly for any fraudulent payment that occurs card due to the lack of 2nd-factor authentication. With 2nd-factor authentication fraudulent card activities are near 0. In Nigeria, all payment gateways are mandated to have 2nd-factor authentication (think Mastercard Secure Code, Visa Verified by Visa, Interswitch Safe Token etc), which is why fraudulent activities of this nature are literally non-existent on Nigerian cards.

Sunday afternoon, my partner called me asking if I had noticed what was going on. I explained we bore no liability for these transactions. We agreed we will not deliver till we could get our acquiring banker to re-confirm where liabilities lay. Come Monday, our acquiring banker confirmed, that we were right— we had no liabilities. Same day, we received monies for orders placed over the weekend, so effectively, we were in the clear.

But we, as Supermart, decided to withhold delivery of the products till the fraudsters could prove their identity to us. This was a tough decision because we needed the revenues. When you run a venture like what we do, you need to show traction and that is a graph that is going up and to the right. You need every revenue you can get today; you worry about tomorrow tomorrow. By being greedy for revenues today, and repeating it tomorrow, and next week, and month, startups find a way to grow. Growth is not something that happens to you, growth is something that you make happen. The default state of your startup is not to grow. So to grow, you get greedy about today’s growth today, and worry about tomorrow’s growth tomorrow.

But we decided to withhold delivery of the products till the fraudsters could prove their identity, because even if you need growth, you need to do so within the confines of what is right. To keep fraudulent revenue by delivering the products is morally wrong and that is not the organization we are building at Supermart.ng. Recall, 10 people can watch one person, one person cannot watch 10 people. You start making morally wrong choices at the top and soon you won’t recognize the organization you have built when you find out what your subordinates have done - case in point, Enron.

Lo and behold, once we asked for scans of photo ID cards of the fraudsters to match the name on the cards they were using, they went quiet.

We debated what to do next. The banks reiterated to us that we were in the clear. Of our own volition though, we weren’t going to deliver till the fraudsters convinced us, a higher bar we had set internally, which they obviously could not. But do we keep the money till the issuing bank requests a recall? Again this is tempting to do because normally if you are caught in a fraud situation as a merchant, you will end up either losing some money or nothing. But over time you lose because sums of negatives and zeroes over time can only be negative. If we have an opportunity to claw some back with a positive, why not take it? Well, we decided, No!, since it’s not our money. Since we know it bore all the signs of fraud, and since we know the card holders weren’t giving us the information demanded of them, and we knew we weren’t going to deliver, we had to refund it.

So we we asked for the money to be sent back to the issuing bank. It was a cumbersome process because the acquiring bank simply didn’t know what to do with this unusual request for them to remove the money from our account because we have decided we won’t fulfill the order because it didn’t meet our moral standards. After a lot of back and forth, we managed to get them to take the money out of our account. Fast forward 3 months later, the bank told us they had stopped international receiving cards because there were too much chargebacks. I believe if they had taken a proactive approach like we had taken, this valuable service would not have been closed - a source of revenues for them.

For us at Supermart.ng, I see it as a case of getting the details right. It is less about what our responsibility in the matter is; it was more about what the right and commonsense thing to do is. Get that right, everyday. Get the details right, everyday; the score will take care of itself.

Moral dilemmas present themselves in very difficult to maneuver ways. When employees face them, they need to clearly know what kind of organization they work for. If it is an organization that will return customer money because it is simply not the company’s money and will not deliver even though it boosts the company’s revenues, then they will decide one way. If it is an organization that will keep the money because the liability is not theirs then they will decide another way. This can only be learnt from watching the guys at the top.

1 person cannot watch 10 people, but 10 people can and do watch the one boss. His body language sends strong signals and the organization follows it. As leaders, it’s important that we are careful what signals we send out, because even the guys of Enron were people with good intentions.

I have come to realize that in all things we need to get the details right. The right players, the right team, the right mentality, the right attitude. Get the details right. Over the course of a season, you may lose small battles, but if the details are right, you will win overall.