Fraudulent retail transactions are on the rise, especially as more shoppers turn to the internet to ring up purchases, making tracking consumers more onerous and costly.
The level of fraud as a percentage of retailers‘ revenues has climbed to 1.58 percent year to date from 1.47 percent a year ago, according to a study by LexisNexis Risk Solutions, an Atlanta-based data analytics provider. The group surveyed more than 650 risk and fraud executives from retail organizations.
“Merchants selling physical and digital goods often apply a one-size-fits-all program to fight fraud, and they use a limited set of solutions,” Kimberly Sutherland, a senior director of LexisNexis‘ fraud and identity management strategy, said in a statement.
“These less advanced and less sophisticated legacy solutions do not appear to be working, given the sharp rise in costs and volume of successful fraud attempts.”
Driving the increases in fraud for many retailers this year are more international transactions and new payment options, such as mobile wallets, the study found.
Retailers say it‘s still difficult to verify a shopper‘s identity online, and there‘s a lag between the time an order is placed and when that transaction is confirmed, which opens the door for more errors or fraudulent activity.
LexisNexis has found more retailers are investing in fraud monitoring, but the technology isn‘t always “optimal” or effective. For example… Stock Daily Dish