Breaking News in the Industry: July 16, 2018

BOPIS fraud is up 250% in 1 year: Can retailers protect their profits without losing customers?

As “buy online pickup in store,” or BOPIS, grows in popularity for consumers, it is also becoming an enticing platform for fraudsters. Retailers are facing a new set of challenges with click-and-collect services that many are not prepared to handle. Although it is hard to compare the rates of fraud in BOPIS to other channels, it is apparent that such fraud is on the rise, according to Riskified’s senior fraud analyst, Emilie Grunzweig. “Just a year or two ago we would have told merchants that BOPIS sales were extremely safe,” Grunzweig told FierceRetail. “They had a fraud rate a fraction of regular e-commerce orders. That’s no longer the case. We’re seeing effective rates of fraud in BOPIS for some of our merchants that are 250% higher than they were in the last year.” Grunzweig points out that this pattern is not new to e-commerce. Typically, as a product, category or method of fulfillment becomes popular with consumers, merchants move to fill it. And simultaneously, fraudsters move to take advantage of it.

BOPIS fraud is similar to any other e-commerce fraud as in the fraudsters use a stolen credit card, place an order online, pick up the goods at a store, then keep the items or resell them for profit. “In all cases, the issue is that the merchant receives a fraudster’s order, fulfills that order and— when the order is charged back as fraudulent—loses the revenue and the goods,” she said. As with any type of online fraud, it’s hard to verify a BOPIS shopper. “BOPIS fraud is particularly difficult because it removes data points that merchants often rely on for verification,” Grunzweig said. For example, a delivery order with a different billing address from a shipping address could be a red flag for a merchant, but BOPIS orders don’t have shipping addresses.

So what can retailers do to protect themselves from BOPIS fraud? 
Grunzweig says that this is where the balancing act comes in. On one hand, merchants can require more information online, or check IDs or verify credit cards in store, but that can take away from the customer experience. And this added friction not only affects that customer but also the merchants, as verification requires more employees, creates a line in the store, etc. “A high-friction route may deter some fraud, but it comes at significant cost,” Grunzweig said. “We strongly believe that the best approach here is to implement really smart fraud prevention for the online order.

Good systems will look at the shopper’s patterns—including prior purchases, behavior on site and links across other orders—and prevent the fraud before the order is placed. This way, merchants are much better equipped to protect their bottom line while providing their shoppers with a great experience and differentiating themselves from online-only retailers.” Moving forward, Grunzweig does not see any signs of BOPIS fraud slowing down, at least until a new platform becomes popular. So putting the necessary fraud protection in place is critical in order for brick-and-mortar retailers to continue to offer this platform in a competitive environment.

“Consumers choose BOPIS so that they can get their stuff quickly, easily, and on their own terms. If merchants go so far toward fraud prevention that they ruin the experience, then they’ve lost their differentiator. We recommend letting technology do the work to provide a great customer experience that’s safe for the merchant,” she added.   [Source: FierceRetail]

Rutgers football players being investigated for fraudulent credit card use

Several Rutgers football players are under investigation for fraudulent use of credit cards, USA Today Network New Jersey confirmed on Friday afternoon. The probe is being conducted by the Rutgers University Police Department and could involve as many as eight players. The names. USA Today Network New Jersey confirmed, are being withheld because no one has been charged. NJ Advance Media first reported the credit card probe on Thursday.

A Rutgers spokesperson would not go into specifics on Friday afternoon, saying, “We will have no comment until after the investigation is concluded.”    The potential credit fraud news comes a day after defensive back K.J. Gray and linebacker Brendan DeVera were dismissed for an unspecified violation of team rules. Both were expected to see key roles this fall. Gray, having played 20 games across his first two seasons, was expected to start at free safety. DeVera played in 11 games as a true freshman in 2017 and was a threat to crack the two-deep at linebacker last fall. On Wednesday, both players acknowledged on Twitter they had been released from their scholarships and were free to transfer.    [Source: Hattiesburg American]

Police search for family accused of shoplifting from shoe store

San Luis Obispo police in California are asking the public for help identifying an apparent family of shoplifters who allegedly stole merchandise from Designer Shoe Warehouse. Chief Deanna Cantrell posted on Twitter Friday that a woman entered the shoe store at 243 Madonna Road, selected items and placed them by the entrance door. A man then entered the store and stole the items, according to the tweet. A pair of young children appears next to the woman in photos posted by the police chief. The family was last seen driving away in a blue Ford Expedition. Anyone with information is asked to contact police.   [Source: KSBY6 News]

Dog rescued from hot car while owner was in jail for shoplifting

A Good Samaritan has helped rescue a dog left in a hot car after its owner was arrested in Auburn Maine. The Sun Journal reports 37-year-old Season Bartley, of Poland, had been arrested on suspicion of shoplifting with her fiancé Saturday at a Walmart in Auburn. Police say a Good Samaritan called 911 the next day when she saw Bartley’s dog in the car alone. The temperature inside the car had been 103 degrees. The dog had been taken to the Greater Androscoggin Humane Society in Lewiston. Bartley picked the dog up after she was released on bail. Auburn Deputy Police Chief Jason Moen says Bartley was taken to jail by the department’s canine officer but “still didn’t think to mention it.” Bartley didn’t return a request for comment Wednesday.   [Source: KRDO News]

Sporting goods store rehires manager who tackled gun theft suspect

Dean Crouch has been rehired as a manager at the Tallahassee, Florida, location of Academy Sports + Outdoors after being fired earlier this week. Crouch spoke to the head of the Texas-based outdoors store Friday and has been reemployed, according to his attorney.  “I am pleased to report that the head of Academy Sports + Outdoors stores spoke with Mr. Crouch and offered him his job back and Mr. Crouch accepted,” his attorney Ryan Hobbs said. A company spokeswoman confirmed Crouch’s reemployment.

Earlier in the week a spokesperson said he was fired in accordance with corporate policy after he tackled a suspect who was attempting to run from the store with a .40-caliber handgun and several boxes of ammunition. The suspect, Jason White, threatened to shoot people with the stolen gun, according to police. He was connected to the theft of two more handguns from a Tallahassee pawn shop. Crouch’s firing drew national attention with many admonishing Academy’s actions and lauding the 32-year-old as a hero who was fired for doing the right thing.   [Source: WFMY2 News]

Sales promotion was so successful, it failed

Build-a-Bear’s one day sale was so successful it was shut down — in some places, just hours after it began. “We have closed lines in our U.S. and Canada stores.” The tweet read “**Urgent Alert: 
Per local authorities, we cannot accept additional Guests at our locations due to crowd safety concerns. We have closed lines in our stores. We understand some Guests are disappointed and we will reach out directly as soon as possible.” The message went out about 11:30 a.m. EDT.

Before the stores opened in the U.S., the long lines caused the company to publish a notice on social media that it would limit the number of people who could take advantage of the deal due to safety concerns. When the deal was announced Monday, parents were overjoyed at the opportunity to walk in and pick out a plush toy for the cost of their child’s age.  (A typical bear costs between $10-$25 plus the cost of accessories.). That excitement turned to disappointment Thursday as eager children were turned away.

Lines stretched outside Build-a-Bear stores with parents reporting waiting up to six hours to buy a plush toy, according to some social media reports. Build-a-Bear representatives told All the Moms that the response to the promotion was  “overwhelming and unprecedented.”  “The response to our Pay Your Age Day event has been overwhelming and unprecedented in our 21-year history, and the safety of our Guests and associates is our top priority.” The company said it is “working to address the situation” and “will reach out directly to our valued guests as soon as possible.”

To earn the “Pay Your Age” promotion, adults had to enroll in the free Build-a-Bear Bonus Club rewards program and provide an email address. Build-a-Bear is expected to contact customers through their email.    [Source: All The Moms]

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