US retail fraud grew significantly in 2018, LexisNexis Risk Solutions finds

Wednesday 25 September 2019 00:13 CET | News

A retail sector report by LexisNexis Risk Solutions has revealed that US retail fraud grew significantly during 2018 for businesses of all sizes, with fraudsters adding small business targets.

Overall fraud attempts doubled year-over-year and tripled since 2017. The LexisNexis Fraud Multiplier, which measures the cost for each dollar of fraud loss, found merchants pay USD 3.13 per lost dollar on average, up from USD 2.94 last year, a 6.5 % increase.

The number of businesses allowing mobile commerce has expanded beyond traditional mid-to-large in-store retailers to include small retailers selling digital goods (such as electronic gift cards, software and mobile apps) and mid-to-large retailers and e-commerce merchants selling physical goods. This, combined with increased international transactions and more automated botnet activity, serves to create a climate where fraud thrives.

While mid-to-large sized retailers and ecommerce merchants are more likely to offer digital goods, small retailers offering digital goods more than doubled year-over-year, from 11% to 26%, broadening the landscape for fraudsters.

In mobile commerce, the average monthly fraud volume rose 133% for mid-to-large sized retailers selling digital goods through the mobile channel. Ecommerce merchants who transact through a mobile browser or app believe that the rise of synthetic identities is their greatest challenge fighting fraud during digital goods sales transactions.

The True Cost of Fraud report surveyed 700 risk and fraud decision makers at US retailers from January through March 2019. Respondents represented a wide spectrum of retail merchants, including: retailers offering ecommerce, retailers receiving a majority of their income though online or mobile channels, and retailers offering mobile commerce.

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Keywords: retail, fraud, report, LexisNexis Risk Solutions, ecommerce, mobile commerce
Countries: World