Top 5 most common retail fraud attacks and how to minimize them

Top 5 most common retail fraud attacks and how to minimize them

12/04/2022

The time and money spent on processing, restocking merchandise, and evaluating a legitimate versus fraudulent exchange directly impacts merchants' sales, gross margins, and profitability.

 

One of the most critical considerations merchants need to make this holiday season is fraud prevention strategies. Unfortunately, retailers often make that decision until the last minute. Why? With an array of new and sophisticated types of fraud, it can be challenging to know what to prepare for.

According to new data, the most common fraud tactics that retailers encounter are return fraud (21%), fake account creation (18%), account takeover (16%), gift card fraud (14%), and synthetic identity fraud (14%). To help ecommerce merchants prepare for these types of attacks this holiday season, let’s look at fraudsters’ tactics and their impact.

The looming danger of return abuse

Return fraud has been a typical modus operandi for bad actors for years, and unfortunately, the rise in online shopping has made it even easier to commit. In fact, out of the $428 billion of merchandise returned last year, roughly $25.3 billion were fraudulent. With 25% of annual exchanges taking place between Thanksgiving and New Year’s Day, short-staffed teams don’t have the resources to evaluate if each exchange is legitimate, making it easier for a fake return to go undetected.

The time and money spent on processing, restocking merchandise, and evaluating a legitimate versus fraudulent exchange directly impacts merchants’ sales, gross margins, and profitability. Since return abuse is difficult to differentiate from a legitimate transaction, merchants often must compromise, relaxing their standards for identifying fake exchanges to enable a seamless customer experience.

source : https://www.digitalcommerce360.com/2021/11/15/top-5-most-common-retail-fraud-attacks-and-how-to-minimize-them/

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