The two worst days of the year for retailer fraud
What are the most fraudulent days of the year to shop? If you guessed Thanksgiving or Christmas Eve—congratulations, you’d be right.
ACI’s team of researchers, which works closely with the world’s largest retailers, scrutinized hundreds of millions of transactions during the period between Thanksgiving and December 31, 2015. We benchmarked against the same timeframe in 2014 to provide the following insights on fraud during the busy holiday shopping season. Although it will likely come as no shock that people are increasingly shopping online, some of the results—and the action retailers must take to curb fraud—may surprise you:
- From Thanksgiving to December 31, 2015, the number of eCommerce transactions grew by 21 percent over the same period in 2014, while fraud attempts increased by 8 percent.
- Fraud attempt rates were highest on Christmas Eve (2.4 percent), Thanksgiving (2 percent) and Black Friday (1.8 percent), as well as on holiday shipment cut-off days (1.6 percent).
- Fraud attempts may be high on Christmas Eve because electronic gift cards—which have a huge fraud attempt rate (15 percent)—are popular last-minute gifts.
- Buy online/pick-up in-store fraud increased by 47 percent (even more than ACI predicted), and is an increasingly common option for consumers purchasing higher end goods (watches, handbags, vacuums, makeup)—which explains why those luxury items are more frequently fraudulent purchases.
There’s no doubt that online shopping is here to stay—and we’d never want to dissuade people from continuing the convenient, procrastination-friendly trend. However, we’d be remiss to not mention the correlation between peaks of online shopping and fraud. Given that undeniable link, it’s critical that retailers be armed with a sophisticated multi-layered, multi-dimensional approach (including real-time detection) to fraud prevention for all transaction channels, at all times of the year.
Thankfully, we have 10 months to prepare for the next onslaught of holiday shopping!
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