Online fraud is on the rise.
Inflation is not the only negative metric on the rise in e-commerce.
According to the April 2022 E-commerce Pulse from fraud prevention solution provider Signifyd, fraud pressure, an indicator by Signifyd of orders presumed to be fraudulent, rose 46% overall in April.
This figure was down from March 2022, but still ahead of April 2021. Signifyd recorded an especially steep year-over-year increase in attempted attacks on aged online accounts, which spiked 352% in April from the year prior. Fraudulent attempts to buy electronic products from aged accounts saw an even higher 401% increase.
According to Signifyd, a 140% year-over-year increase in gift card sales in April may have helped spur attacks on aged accounts. When infiltrating an account, Signifyd says scammers often have full access to stored credit card numbers, gift cards, and credits from returned purchases, enabling them to make and manipulate purchases with unused credit and stored gift card numbers before a customer is aware.
Other findings from the Signifyd E-commerce Pulse include:
- Sales in the health, beauty and cosmetics vertical using buy now, pay later (BNPL) payments grew 93% in April from the year before. Cart size saw a 4% increase in average order value, and omnichannel growth in the vertical overall rose 135% from a year ago.
- Online apparel sales rose 12% year-over-year. According to Signifyd analysis, photos of more realistic-size models and a more extensive description of the content of product material have helped online shoppers feel more comfortable about making a purchase.
- Claims by customers in April 2022 that a package of health, beauty and cosmetic items was significantly damaged or not as described rose 34% over last year. And in home goods, customer abuse rose 122% from a year ago. When these claims are false, Signifyd says they are generally attempts to receive an underserved refund or get an item for free.
- Gift spending in the home goods vertical rose 525% year-over-year, which Signifyd says signals an ease in port congestion.
- Average online order value across all verticals rose 180% year-over-year.
Kroll: Fraud poses serious risk to businesses
According to the recent Global Fraud and Risk Report from security company Kroll, 82% of over 1,300 surveyed senior decision-makers for risk strategy said their organizations had been significantly impacted by fraud and illicit activity. Seventy-eight percent of respondents’ organizations had conducted investigations into fraud, corruption or related misconduct in the past three years.
Looking specifically at retail, wholesale and distribution respondents, the survey found that 81% had been significantly impacted by serious misconduct and 69% had conducted an internal investigation in the last three years. In addition, four in five (79%) respondents overall said the cost of these investigations had increased, particularly for organizations with revenue of more than $15 billion.
In response to the high reported rates of serious misconduct, more than three-quarters (78%) of surveyed organizations stated they had conducted internal investigations over the past three years.
To see the latest Signifyd E-commerce Pulse data, click here.