Retailers warned to watch out for festive fraud
Online retailers and consumers have been warned to watch out for fraud over the Christmas period, as research predicts a rise in criminal activity.
According to global payments company ACI Worldwide, retailers can expect to see an 11% increase in fraudulent activity when compared to 12 months ago.
The predictions are based on hundreds of millions of transactions carried out by European online retailers.
The figure refers to the volume of fraudulent attempts that are expected during the festive shopping season, with fraud expected to climb in line with overall rises in sales.
Christmas Eve is likely to be the peak day for fraudulent activity, with an expected fraud rate of around 2.5%.
In terms of sales processing volumes, Cyber Monday and Black Friday lead the way, which means they are also days when higher levels of fraud are expected.
According to ACI Worldwide, the average price of fraudulent transactions will actually decrease by 4% this year when compared to last – falling from £188 in 2015 to £181 in 2016.
Designer sports shoes, clothes and cosmetics are the products most likely to be targeted, meaning retailers will need to take action to ensure they do not fall victim.
For small firms the results of fraud could be a major issue, as reputational damage can be difficult to repair.
In severe instances, it may impact on sales to such an extent that the firm has to cease trading, or at the very least assess its options.
The festive period provides a fantastic opportunity for online retailers but they will also need to protect themselves to ensure their revenue does not take a hit.
Having a strategy for managing fraud is key, as transactions need to be monitored to ensure the consumer experience is not impacted by any criminal actions.
By Phil Smith
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