The disturbance is a great equalizer. As the world battles the ongoing pandemic, retailers continue to seek to better serve new audiences and meet accelerating demand for integrated digital customer experiences, regardless of their pre-Covid business models.
These changes, while beneficial for many retailers, carry a renewed risk of online fraud.
Cybercriminals are turning more and more to automation to execute bigger attacks that are worth bigger gains, and all at inhuman speed. While known strategies like adding friction to the user journey can stop some frauds, they can also prevent customers from making purchases, resulting in lost revenue and increased false positives.
Retailers need a more complete understanding of what they face online, as physical loss prevention tactics, even adapted to the digital landscape, were never designed to tackle automated abuse on a large scale. .
1. Scammers make bigger bets
Between 2019 and 2020, the average value of attempted fraudulent attacks increased by 70%.
With the pandemic pushing more consumers online and disrupting the predictability upon which risk management teams and tools depend, scammers are sneaking into higher-value purchase attempts that are difficult to detect with evidence-based systems. rules.
2. They make more bets
With the past 18 months of increased traffic and digital retail transactions, scammers aren’t just trying to steal more at a time – they’re trying to steal more, period.
Cybercriminals are increasingly turning to automation to overwhelm teams and systems of trust and security. Between 2020 and 2021, the rate of retail fraud jumped 50%.
3. Account takeover is the weapon of choice in the fraud economy
Between the second and the third quarter of 2020, account recovery (ATO) jumped 378%. That number isn’t fixing, even as we head into two full years of pandemic-driven changes in the way retailers do business.
The fraud economy – the interconnected global network of fraud vectors, cybercriminals and hacker tools that threatens traders every day – frequently produces ATO attacks, which are responsible for billions of pounds in losses each year in the world.
4. Consumers prioritize security over loyalty
Depending on the type of retail fraud that occurs – ATO, payment fraud or content scams – between 33% and 56% of consumers surveyed by Sift said they would abandon a brand for a competitor if they were the victim of fraud while visiting that company’s site or app.
5. Friction fights fraud and drains profits
Adding friction to the user journey is a great way to stop certain types of fraud, as long as retailers aren’t worried about losing real customers in the process. Most consumers won’t try more than three times to make a purchase before leaving for a competing app or website, with 47% willing to abandon their cart if they encounter any issues while attempting to purchase. .
See our infographic here to learn more about these and other retail fraud statistics, as well as expert insight into how digital retail fraud works, how it is and how it is evolving, and why Omnichannel merchants are turning to real-time machine learning to keep their customers safe without sacrificing growth.
Jane Lee is a Trust and Security Architect at Sift.