Retailers expect to lose an estimated $8.76 billion in return fraud this year - $3.4 billion during the holiday season alone, according to a new survey.
The National Retail Federation’s (NRF) 2013 Return Fraud Survey found that 5.8 percent of holiday returns are fraudulent, up from 4.6 percent last year. Plus, a significant 60.3 percent of retailers said that the return fraud they experienced was linked to organized retail crime groups.
Malissa Nelson, director of marketing and eCommerce at Dean and Deluca, spoke on FierceRetail's webinar, "How Retailers Are Embracing Omnichannel Strategies to Improve Customer Experience," and shared how the foods retailer connects with customers in store and online, and the number one way to get customers to trust brands.
This is the worst time of year for beauty retailer Sephora to make it difficult for its shoppers to buy their products, but that is exactly what is happening.
Some shoppers in Sephora’s VIB Rouge customer loyalty program – dedicated to customers who spend at least $1,000 per year – have been banned from online purchases. On beauty blogs, the VIB Rouge customers report that Sephora.com banned them from making purchases after they placed too many orders.
Like two peas in a pod, the holiday season rings in an increase in gift card fraud. Gift cards are being purchased in stores and online in record numbers and criminals see this as a prime time for skimming and online card fraud.
Consumers loaded $112.3 billion onto gift cards in 2012 alone, according to Mercator Advisory Group, representing a lucrative windfall not only for retailers but also for thieves.
A very serious gift card scam that developed this year involves phoning in bomb threats in an attempt to force retailers to hand over prepaid cards’ identifying information.
Numerous retail organizations and research firms predicted that there would be a significant rise in holiday shopping via mobile devices this holiday season, and it turns out they are right so far. Early reports indicate that Cyber Monday’s overall online sales topped $2 billion, shattering last year's U.S. e-commerce record of $1.465 billion.
Plus, 18.3 percent of all online sales across the 2,000 major retail sites that the Adobe Digital Index 2013 measures came from tablets or smartphones, an 80% increase over last year.
Mobile traffic exceeded 17 percent of total online sales, an increase of 55.4 percent over 2012's Cyber Monday, according to IBM Digital Analytics data. Retailers catering to smartphone and tablet users benefited the most, with mobile traffic accounting for 32 percent of site visits, a 45 percent rise from last year.
It is retailers’ shortest holiday shopping season in years, so cue the ridiculous publicity stunts. That is what I thought soon after Amazon (NASDAQ: AMZN) CEO Jeff Bezos made his grand announcement about delivery drones – which are years away from being utilized – on “60 Minutes” the day before Cyber Monday.
But hey, Amazon is not the only one. Kmart launched the earliest holiday TV campaign this year on September 9, in an effort to promote its layaway program for holiday gifts.
It’s not that Amazon’s delivery drone idea is absurd. It’s just that the grand scale in which it was announced – with such curious timing – allows the e-commerce giant to be the butt of jokes and parodies, which it has this week.
Negative online reviews have been a problem for retailers since they began selling items online. Bad ratings on third-party review sites such as Yelp and TripAdvisor along with Amazon and shopping sites can literally cost businesses thousands or millions of dollars in lost sales.
In fact, 80 percent of online shoppers have changed a purchase decision based on a bad online review. That amounts to an alarming amount in lost sales and damaged reputations. Some retailers and hotels have taken matters into their own hands, suing the review sites over lost sales and damaged reputations. In one case, an owner whose hotel was listed at the top of TripAdvisor’s “Dirtiest Hotels in the U.S.”, sued TripAdvisor for $10 million.
All retailers and any business that processes payments should have a new document on hand that is meant to prevent and mitigate some of the millions of dollars in losses from card data breaches annually.
When the Payment Card Industry (PCI) released its updated Data Security Standard 3.0 earlier this month, it said that companies should create a data flow diagram showing all the individuals, systems, and applications that have access to cardholder data. This idea first came about, PaymentsSource reported, after a hacker produced a color-coded scheme showing where sensitive data was stored at his targeted organization.
“In the majority of compromises we’ve seen over the past few years, the merchant was trying to do the right thing but was unaware that cardholder data existed in a location that was not being protected. What these compromises have demonstrated is the business value for having a clear way to identify where the cardholder data is in your organization,” Troy Leach, chief technology officer for PCI’s Security Standards Council, told StorefrontBacktalk.
On the brink of obscurity, J.C. Penney Co. Inc. (NYSE: JCP) executives finally have a reason to hold their heads up. The struggling retailer produced positive growth of 24.3 percent from its e-commerce division during the third quarter, rising to $266 million. However, this news arrives at a time of great uncertainty within the company, as they are being removed from the S&P 500 Index in favor of the S&P MidCap 400. The S&P decision comes as no surprise, since J.C. Penney continues to turn in quarterly losses, resulting in plummeting stock prices.
I’m sure all retailers wish their cashiers were more vigilant in catching credit and debit card theft at the time it occurs. But who really expects shoppers to be aware of card fraud in progress and alert stores to what is going on? That is exactly what happened at a Walmart store in American Fork, Utah, last week. A woman waiting in line to check out happened to stand behind two men attempting card fraud.
Apparently, retailers’ extensive prep work – including shoring up their fulfillment and shipping processes – will pay off in online sales. Holiday e-commerce sales are expected to soar 15 percent this year to $78.7 billion, according to numbers released this week by Forrester Research. The Forrester projection is somewhat in line with other researchers’ estimates: EMarketer, also projects that U.S. holiday e-retail sales will increase 15.1% this year, while Deloitte LLP predicts a 12.5 percent to 13 percent increase in U.S. non-store sales, which primarily consists of online sales.
We think that a new tech, which compares the physical location of a cardholder’s mobile phone against the location of the ATM or point-of-sale (POS) terminal where the card is being used, will significantly reduce credit and debit card fraud.
U.S. regulators this week tackled the tough issue of regulating virtual currencies such as Bitcoin. The Senate Committee on Homeland Security and Government Affairs heard from Justice Department officials, who say they need help regulating digital currencies as well as Bitcoin proponents, who say the government should stay out.
Bitcoin’s global popularity has been soaring, and its value jumped to $900.98 for a single bitcoin this week. Bitcoin can be purchased and exchanged for standard currency, such as dollars, euros and yen, at bitcoin exchanges, but bitcoins have fluctuated wildly in value.
There are almost 12 million Bitcoins in circulation, giving the currency, a market value of nearly $8.5 billion.
Bitcoin advocates say that virtual currency could transform economies in developing countries where people have little access to banks and financial services. The software for creating a Bitcoin "wallet," allowing a user to send and receive bitcoins, is public and can be used on a mobile phone, USA Today reported.
When it comes to mobile payments by consumers, you have a tale of two worlds. At least that is where the mobile payments marketplace was in the past. On one hand, operators could utilize NFC (Near Field Communication), which boasts approximately 400 million NFC-enabled devices and hopes to grow to an estimated one billion by 2016. On the other hand, you have Bluetooth devices, which account for around three billion devices annually.
Now, the future has arrived and the two options may soon be one and the same. In an unprecedented move designed to secure a brighter future in the world of m-commerce, both of these mainstay entities have developed an alliance.
Changes in customers’ shipping addresses is one of the key ways that thieves are now getting away with online credit card fraud, financial experts say.
Changing addresses in hacked credit card accounts provides a way for thieves to receive delivery of goods purchased with stolen payment card accounts, Julie Conroy, an analyst at financial services research and advisory firm Aite Group, told Internet Retailer.
This week, Macy’s (NYSE:M) began a pilot program testing Apple’s (NASDQ: AAPL) iBeacon technology in certain stores, a step towards validating the long-time efforts by Apple to grow its Bluetooth location-sensing technology.
In its partnership with rewards app Shopkick, Macy’s has several Bluetooth transmitters in a few departments of its stores in New York and San Francisco. The test, with a few Shopkick employees to start out, will last for several weeks before being rolled out to a wider group.
In actuality, Shopkick adapted the technology Apple built into its latest mobile software. Shopkick’s shopBeacons enables shoppers with iPhones and some Android phones to have their Shopkick app “woken up” by a signal from Bluetooth transmitters when they enter Macy’s, even if their phones are in sleep mode, according to The Wall Street Journal.
Secret Service Investigating Rash of Card Fraud in Northwest, Supermarket Wholesaler May be to Blame
The Secret Service is investigating a rash of credit and debit card fraud reported by customers of more than a dozen banks and credit unions in the Northwest. Officials have not yet been able to determine the amount of losses, but hundreds of cards have been compromised.
“For the Spokane region, it’s a substantial fraud incident,” Kevin Miller, the agent in charge of the Secret Service’s office in Spokane, Wash., told the Spokesman-Review, calling it the largest outbreak of credit card fraud he’s seen in nine years in Spokane.
Do consumers want credit card information stored on a SIM card controlled by a wireless carrier, or are they comfortable with a new near-field communication (NFC) technology as an alternative? Google has positioned the technology necessary to make the latter option a reality.
With last week’s unveiling of the latest updates to the Android operating system, which is now powered by Google’s KitKat on Nexus 5 smartphone, the tech giant has drawn the line in the sand in a quest for dominance in the mobile payments marketplace.
Thanks to consumers’ economic concerns and the government shutdown this fall, various pundits and researchers are predicting softer e-commerce sales during the 2013 holiday season. However, those predictions are offset by other, more positive outlooks and well, common sense.
The latest sour forecast comes from comScore, which found that U.S. consumers spent 13 percent more on e-commerce – representing $53.2 billion in total sales – for the third quarter of 2013.
All retailers know that combating shrink is one of their biggest challenges and one of the biggest financial sinkholes for their businesses. A new study reveals the severity of the problem globally, but also offers solutions for preventing theft.
Shrink – comprised of shoplifting, employee or supplier fraud, organized retail crime and administrative error – cost the retail industry more than $112 billion globally last year, according to the 2012-2013 Global Retail Theft Barometer, On average, theft represented 1.4 percent of retail sales globally. Since the Barometer is likely basing its numbers on reported crimes and retailer surveys, we think the global shrink problem is much worse.