Retail fraud attempts rose 8% over holidays

According to new data from ACI Worldwide, online transactions worldwide increased 21 percent over the holiday shopping season, with a corresponding 8 percent rise in fraud attempts between Thanksgiving and the end of 2015.

The National Retail Federation estimated that fraud would cost retailers $2.2 billion in 2015.

Fraud attempts peaked on Christmas Eve, 2.4 percent; Thanksgiving, 2 percent; Black Friday, 1.8 percent and holiday shipment cut-off days, 1.6 percent.

The rise of fraud attempts on these dates are for two reasons: One, electronic gift cards—which have the highest fraud attempt rates—were a popular last-minute purchase. And two, buy online pick-up in-store, which also has a high fraud rate, increased on those days. Fraud rates for buy online pick-up in-store increased 47 percent, and fraud on next day and overnight delivery products was up 50 percent.

International sales for retailers increased by 29 percent by volume and 22 percent by value due to favorable currency rates, shipment costs and regional-specific products.

"Global commerce has seen a huge increase in the past year, and it is critical for merchants to have integrated fraud prevention monitoring with cross-border payment acceptance, along with single tokenization and a single view of the customer," said Mike Braatz, senior VP, merchant and risk solutions, ACI Worldwide. "Merchants must implement a sophisticated multi-layered, multi-dimensional approach to fraud prevention for all transaction channels."

In 2015, one out of every 67 transactions was a fraudulent attempt, versus one out of every 72 in 2014.

There are some positive changes from 2014, as fraud made by an organized retail crime group was down from 78.2 percent in 2014 to 71 percent in 2015. And employee return fraud dropped from 81.8 percent to 77.4 percent.

For more:
-See this ACI Worldwide press release

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