Apr 09, 2020 - 04:55 PM
“E-retail is expected to be confronted with an alarming 65% of fraud by value by 2020 – facing losses of $16.6 billion, according to Juniper Research. Although luxury goods were often targeted by fraudsters in brick- and-mortar stores, apparel websites have been a heavy target online, experiencing a 70% increase in attacks in 2016.
The holidays are a particularly dangerous time for all merchants, with retail fraud attempts surging 31% in the Q4 2016 over the previous year – and far outpacing the 16% growth in the number of overall transactions, Security magazine reports.”
Trends in Retail Fraud: What You Need to Know
~$17 billion in fraud losses is pretty significant, especially when you consider the impact on small business. $Sadly, all retailers, ecommerce and bricks & mortar) have to factor in the cost of fraud in their business operations.
Per your question where the carrier has delivered the products to the customer but the customer complaints and claims that they never received it. The responsibility falls on the business owner to curtail fraud as much as possible in order to maintain profitable as business
To accomplish this, as much as possible, and as a matter of business operations, consider the following-
· Stay vigilant. If you automate fraud detection processes/technologies then great. If not, then you may to watch out for customers who-
o Asks to use an alternative, private shipping company
o Use a different delivery address than the address attached with the credit/debit card. Of course this is often the case during the holidays which is understandable.
· Take Advantage of Fraud Detection Solutions
· Use a trusted shipping & delivery service provider
· Whenever possible or you suspect a potential for shipping fraud, send packages through secure systems.
· Require signatures for items that are above a certain threshold amount
· Since there’s always fraud in retail, most brick and mortar retailers do add a certain percentage to the price of each item as an insurance to cover for the expected fraud. You could add a percentage amount to all the items listed in your online store to cover for the cost of any future fraud claims by unscrupulous customers. Of course, you want to be careful not to excessively penalize innocent customers if you choose this option. So this might require research & data analytics to get a better idea where fraud is coming from
· Pay attention to unusual shipping requests from the customer. Do not let the customer choose a private, alternative shipper than the one you have an agreement with for your delivery service.
· Create a blacklist of prior fraud delivery customers and flag future transactions.
· Last but not least, consider using a larger ecommerce platform such as Amazon’s FBA. FBA does charge higher fees to be on their platform but it also assumes the risk associated with technology, ecommerce and shipping & fraud issues.