eBookJanuary, 5, 20223 min read

Season’s Scammings: Stay Safe from ecommerce Fraud This Holiday Season

The holiday shopping season has officially arrived!

With the holidays comes an uptick in ecommerce fraud, which will cost retailers over $20 billion in losses by the end of 2021.

Holiday Shopping is Starting Earlier

55% of consumers will start shopping before Thanksgiving

In 2021, experts predict ecommerce revenue will approach $5 trillion, a $1 trillion increase from 2020. Economists believe that ecommerce will account for 18.9% of this year’s holiday season retail sales in the US.

73% of ecommerce sales expected to be made on mobile devices in 2021.

ecommerce merchants will experience increased holiday season revenues; therefore, it’s essential to be prepared.

Our Fraud Predictions for 2021

Holiday Shopping Will Continue to Start Early

The National Retail Federation found that, in 2020, 42% of consumers started holiday shopping earlier than they typically would have in years prior. Sellers started rolling out Black Friday deals in October. This is new tradition is expected to continue in 2021.

Shopping Holidays are lasting longer

Black Friday is expected to be more digital in 2021, as the pandemic still lingers and popular stores such as Target, Walmart, and Best Buy have announced they will be closed on Thanksgiving Day. Also, Cyber Monday has steered away from a one-day phenomenon and has become a week-long event.

Expect an Increase in False Declines

An influx in online orders can mean an increase in false declines. Make sure your fraud prevention strategy isn’t overly restrictive, or you could be turning down good orders. Remember mismatches between the billing and shipping address are expected to increase during the gift-giving season.

Top targets for fraud during the holiday season:

Electronics
Jewelry
Home Goods & Appliance
Athletic & casual footwear
Designer clothing + Accessories
Alcohol & Tobacco

Regular Day vs Holiday Season number of false declines

The State of Fraud Report

The State of Fraud Report highlighted several types of attacks that are likely to remain prevalent through the crucial holiday shopping period.

Types of Fraud Attacks to be on the lookout for:

Account Takeover
Curbside and buy online, pick up in-store schemes
Return fraud
Automated card testing
Synthetic identities
Mule fraud
Promotion abuse
Unathorized reselling

Other fraud attacks to look out for

Gift card fraud
Using gift cards during the holiday season is very common. Gift cards are a
popular choice for fraudsters since they don’t have the same level of
protection as credit cards.

Friendly fraud
Also known as chargeback abuse, friendly fraud is any scheme where a
shopper makes a purchase with their own card but then makes an illegitimate
chargeback claim to receive a refund.

False item-not-received claims
Also known as chargeback abuse, friendly fraud is any scheme where a
shopper makes a purchase with their own card but then makes an illegitimate
chargeback claim to receive a refund.

Tips on How Merchants Can Be Safe and Maximize Their Revenue This Holiday Season

Don’t Rely on Gateway Filters
Rules-based filters that automatically decline orders with an AVS mismatch are overly simple, and can result in a high false decline rate. Instead, opt for fraud solutions that take a holistic view of risk and trust indicators.

Don’t Over-burden Your Customer Service Team
Manually reviewing orders during the busy season can become hectic and leaves room for errors. With a full-service fraud solution, you’ll identify more fraud, increase sales, and decrease false declines and chargebacks.

Beware the Holiday Hangover
Many businesses loosen their fraud prevention policies during the holiday season to keep up with the influx of orders, only to be shocked by the number of chargebacks that appear in January. Now is not the time to relax your fraud strategies. Full-service fraud prevention companies can help you weather busy seasons without staffing up your internal team.

About NoFraud

Founded in 2014, NoFraud is an ecommerce checkout and fraud prevention pioneer, ensuring every ecommerce merchant has access to the services and protection they need to scale with confidence. The company provides online merchants with cost-effective, easy-to-use solutions that remove friction and fraud from their ecommerce funnel to grow sales and improve the purchase experience for customers. NoFraud provides the industry’s most accurate ecommerce fraud protection solutions to increase merchants’ conversion and approval rates while virtually eliminating fraud. Visit www.nofraud.com for more information.