The coronavirus pandemic has resulted in significant changes in customer purchase behavior and increased concerns about ecommerce fraud. Luckily, overall ecommerce fraud doesn’t appear to have risen disproportionately to the amount of online purchases. “We have not seen a substantial […]
Luckily, overall ecommerce fraud doesn’t appear to have risen disproportionately to the amount of online purchases.
“We have not seen a substantial change in the quantity of card-not-present fraud at this time,” stated Eyal Raab, vice president of sales and business development for Riskified, an ecommerce scam company.
“There’s been some fluctuation across businesses, but that is not uncommon. What we have seen is a change in purchasing behaviours,” Raab continued.
“What we’ve seen is a change in purchasing behaviours…”
“For instance, we have seen a significant increase in customers using mobile apps to make purchases with a drop in the proportion of orders placed via desktop or mobile web. That fits. People are staying home instead of going to an office, so they are spending more time on their mobile devices.
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“We are also seeing people altering what they purchase, with big gains in food purchases, fitness equipment, and home improvement products. All that makes sense.”
Regions of Concern
Although, as Raab said, there haven’t been significant changes in the proportion of transactions influenced by fraud, merchants do have to know about changes in how fraudsters work.
“Ecommerce is changing rapidly through this global pandemic, with a few businesses experiencing big changes in transaction volumes or more requests for quicker transport,” said Rich Stuppy, chief client service officer at Kount, a fraud prevention company.
“Especially in these conditions, fraud prevention is not just about stopping chargebacks, but in addition, it plays a role in approving and expediting orders in addition to stopping policy abuse that contributes to retail and disposing arbitrage difficulties. It’ll be critical to track fraud trends in the coming weeks, as chargebacks start to roll in from this age.”
Stuppy’s remarks are consistent with current data from TransUnion, a consumer credit agency. Some 22 percent of those 1,068 American adults TransUnion surveyed claimed they’d”been targeted by electronic fraud linked to Covid-19.”
“It is apparent that social distancing has shifted consumer shopping behaviors globally and will continue to do so for the near future,” said Greg Pierson, senior vice president of business development and planning at TransUnion. “No doubt fraudsters will continue to follow the tendencies of good customers and adapt their strategies accordingly.”
Effectively, this means crooks and cheats which were hacking, phishing, social engineering, or using banking and romance scams to steal a customer’s identity have altered their approaches to include Covid-19-related messages and mimic stay-at-home buying behaviours.
Raab reiterated,”We have not seen a substantial shift in the amount of fraud, but we’ve seen fluctuations in overall volume for a number of industries.
“Industries where valid purchases have slowed — but fraud has remained fairly constant — might seem especially risky at this time, but that is generally due to the decline in legitimate clients rather than an influx of fraudsters.”
Thus, on the one hand, ecommerce retailers will need to focus on fraud trends. Even though there might not be plenty of Allied burglars attacking the industry anew, the methods established cheats use will likely be changing.
Practically, this could indicate that ecommerce retailers will need to be careful when accepting and fulfilling”questionable orders.” But those very same retailers also have to know about the potential for comparatively more”false positives” thanks to changes in how valid, trustworthy customers store.
“If merchants are utilized to a single routine and see a rapid increase in something unfamiliar — stockpiling food or purchasing treadmills through a mobile app, for instance — they should be sure their systems adapt to approve those orders as opposed to viewing them as questionable and possibly declining them,” said Riskified’s Raab.
Raab’s company, its competitors, and TransUnion, have all gone to great lengths to assist ecommerce merchants approve more transactions. The objective of fraud prevention and detection would be to filter out the crooks while accepting great customers who may be exhibiting a new behaviour or shopping at a new manner.
Raab added a little advice for ecommerce retailers that are especially concerned about fraud throughout the pandemic.
“Try not to overreact to fear of fraud. Things can change, of course, but the pandemic did not suddenly create legions of new fraudsters. So there is no reason that ecommerce merchants should anticipate greater danger,” Raab said.
“Rather, think of the present climate, and be sure you and your systems can quickly adjust. Recognize that purchasing has shifted globally, and patterns that triggered alarm bells in the past could be individuals adjusting to the new normal.
“If merchants can adapt to these changes, they will have the ability to approve as many valid requests as possible, and consumers will receive their goods.
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