The COVID-19 situation has changed rapidly. As the crisis has grown, the amount of people deemed safe to gather has quickly dwindled from thousands, to hundreds to ten. Worried about their safety and abiding by shutdowns, social distancing and stay-at-home orders, more and more Americans have turned to online shopping.
According to a statement by the CDC, “[T]here is likely very low risk of spread from products or packaging that are shipped over a period of days or weeks at ambient temperatures.”
Likewise, the World Health Organization addressed the growing concerns, stating “The likelihood of an infected person contaminating commercial goods is low and the risk of catching the virus that causes COVID-19 from a package that has been moved, travelled, and exposed to different conditions and temperature is also low.”
Before the COVID-19 outbreak, many American shopped online just once per week. According to a survey by CommercialCafe, that number jumped from 45 percent to 59 percent as direct result of the crisis. In addition, an international study from Paysafe discovered that more than half of U.S. consumers (54{63927fabea5d35cf35f4eb5d667edbbc721939a827afe3e3688ee6531d5a1f77}) have turned to online shopping.
Jump in E-Commerce Transactions Spikes Fraud Rates
As lockdowns continued through April and May, more and more people turned to online shopping. According to new analysis from ACI Worldwide, the retail sector in general saw a 209 percent growth in e-commerce transaction in April alone, compared to the same period the year before. In addition, the gaming segment experienced the largest jump, up 126 percent year-over-year in April.
Executive vice president at ACI Worldwide, Debbie Guerra, stated that “Trends in e-commerce purchasing behaviors that we began to see in March have continued in April, as hundreds of millions of consumers around the world adapt to the restrictions put in place to inhibit the spread of the coronavirus.”
She went on to say, “Consumers are increasingly making use of click-and-collect options because of convenience and safety—but these changing patterns also attract fraudsters, resulting in a significant uptick in attempted fraud.”
As e-commerce has grown, so has fraud threats. Fraud has been a problem for some time, but fraudsters are now taking advantage of the massive growth in online shopping. Research has found that fraud attempt rates jumped to 4.3 percent in April – slightly lower than 5.3 percent in March, but still higher than the year before at 3.8 percent.
It would seem the segments that are drawing the most attention from fraudsters include those that have experienced high sales growth, like consumer electronics. Research has also revealed that the transactional value of attempted fraud rose by 9.9 percent, as seen by fraudsters continued focus on high-value items like laptops and TVs.
To protect themselves against fraudulent transactions and friendly fraud, merchants will need to be vigilant in chargeback protection and chargeback insurance. During these unprecedented and uncertain times, the best move any business owner can make is ensuring they have the best resources and the best services for their customers.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated high risk merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.