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I'm currently using the first tactic that is instant download upon receiving customer payment.

The pros of this approach:

  1. Customer satisfaction is better as they immediately get what they paid for
  2. Less labor costs as we don't have to manually review and approve the order

The cons of this approach, however, are:

  1. Frauds are more as fraudulent buyers of digital goods target primarily merchants who offer instant downloads

The pros of manual review & approval:

  1. Frauds losses are less

The cons of manual review & approval:

  1. Customers would be less satisfied? I'm not so sure about this as I never tried this approach.
  2. More work at our ends

Which tactic are you employing for your digital goods business? Why?

I'm very much concerned about the customer satisfaction part. My catalog are comprised of developer tools and website scripts with prices range from $100 to $500. Would you accept 24 - 48 hours of review and approval time for such an order?

Would conversion rate decrease should we make it clear that it takes 1 - 2 days for us to review and approve the order?

The way I see it, manual review & approval impresses the buyer about how the merchant holds dear of what is being offered, which ultimately makes the merchant look more trustworthy and reliable. Is it so?

To manual review or not, which is to drive more sales (higher conversion rate)?

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I would opt for the instant download process over the manual version, as this benefits the users most.

Perhaps you can introduce some automatic fraud checking, if someone fails these, flag them for manual review.

Bear in mind that it's a good idea to communicate to the user that they have been flagged in someway, otherwise they might try the download process over and over.

There are several fraud checking APIs out there, or you could have a simple blacklist based one to check the domains of e-mails used in signups for disposable emails or specific ones you wish to block.

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