Cosmetics are the most vulnerable area for electronic fraud

According to statistics , the amount of online shopping fraud is on the rise.

Reports of online shopping fraud in the U.S. more than doubled in 2020 , and fraud volumes in the first half of 2021 continue to be well above pre- pandemic levels, according to the 2021 Holiday Season E-Commerce Market Report from fraud management platform Riskified , which cites the Federal Trade Commission’s latest report to Congress.

The study also analyzed the changes in fraud levels observed by Riskified during the 2020 holiday season in different categories, with January of that year as a baseline. Cosmetics ranked highest in fraud levels, with a 47% increase in fraud attempts. Fraud attempts in the athletic shoe category increased by 8%, while digital services and children's products saw increases of 12% and 15% respectively since 2020.

The report also found that fraud attempts related to buy online , pickup in store (BOPIS) increased during the 2020 holiday season . Fraud attempts via BOPIS orders increased more than fourfold by December compared to January of that year . BOPIS was 50-70% riskier than average in the fourth quarter of 2020 compared to all other fulfillment methods.

Other highlights from Riskified’s 2021 holiday season report are as follows.

During the holiday season, desktop orders were 17% more likely to be fraudulent than mobile orders ; risk levels for direct payments such as ACH ( Automated Clearing House) and wire transfers decreased significantly, as did buy now, pay later solutions ; credit card risk levels remained stable ; the growing popularity of gift cards resulted in very volatile risk levels for fraudulent transactions ; e-wallets are becoming increasingly risky, as risk levels have increased by nearly 50% since January of this year ; fraud is a key factor affecting customer retention , with 76% of consumers saying they would be less likely to shop online with that merchant again if they became a victim of account takeover while shopping with that merchant.

“Mitigating fraud is critical to delivering an exceptional online shopping experience,” said Peter Elmgren, Chief Risk Officer at Riskified. “With e-commerce sales expected to break records this holiday season, retailers should prepare for a surge in fraud attempts that will follow.”

E-commerce

Fraud

Retailers