A survey by fraud prevention solutions provider Riskified has found 82% of retailers believe they have seen a climb in fraud attempts since the start of the Covid-19 pandemic.
Riskified claimed the survey – which was conducted on 4,000 consumers and 400 retailers across the UK, the US, France and Germany – highlights how widespread online retail fraud as well as the extent of its financial impact and how its viewed in the eyes of shoppers and retailers.
In the UK, it was found that Card Not Present fraud had the biggest negative impact on revenues – at 60% – while promo abuse came in at 48%.
The survey found that the economic impact of fraud of retailers’ was severely damaging, with up to 26% of global retailers claiming that fraud was significantly damaging their profitability. In addition, a total of 34% of global retailers said that they had lost between 5% and 10% of their ecommerce revenue to fraud last year.
Over half of retailers detailed that they were confident in the ability to prevent ecommerce-related fraud at 55%, while only 34% of all consumers trusted a retailers’ ability to prevent such fraud – emphasising a clear confidence gap between retailers and consumers.
Up to 27% of online consumers claimed that their concerns over online shopping continue to grow while 51% of them said retailers will find it ever tougher to prevent fraud over the coming year.
A key factor for consumer confidence in online shopping was long-term brand impact, with 39% of UK consumers surveyed stating they would blame the retailer if their account was compromised and as many as 67% saying they wouldn’t buy online again from a shop where their account had been compromised.
Two-factor authentication was recognised by respondents as the most effective tool when it comes to fraud prevention, but it was also ranked as the most damaging to revenue for UK and French retailers and the second most damaging for US and German retailers. According to Riskified, this can be attributed to the friction it can add to customer experience.
Riskified CRO Peter Elmgren said, “It’s no surprise that the rapid growth of eCommerce has also led to a rise in eCommerce fraud, and as our research shows, the impact is significant for both retailers and consumers. Fraud presents unique challenges for retailers who want to protect their businesses while also delivering a seamless and safe experience for shoppers.
“According to Juniper Research, retailers lost £12.3bn to eCommerce fraud in 2020, and that number is expected to exceed £18 billion in just three years. By continuously learning from our retailer network and feeding real-time data into our sophisticated machine learning platform, we’re able to help our retail partners build trust and confidence in the online shopping experience.”
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