The holiday shopping season is upon us, and it’s expected that over the Thanksgiving to Cyber Monday weekend, US merchants will experience an increase of 20% in transaction volume and value, compared to the same period in 2013. And that means gold for cyber-criminals looking to push through millions in bogus transactions.
Retail Decisions is predicting an increase in fraud attempts during this holiday season, and expects them to account for 2.5% of all sales. A large percentage of this increase is likely to be focused on ‘buy online, pick up in-store’ sales as well as last-minute purchase options, such as digital downloads and virtual gift cards just prior to Christmas.
Already, over the first half of November 2014, there has been a 30% year-on-year increase in the volume of online transactions being processed through Retail Decisions’ US retail merchant base. The overall value of transactions also increased, by 25% over the same period in 2013—a healthy growth rate.
Also, with Black Friday looming at the end of the week, the company said that it has seen the average ticket price remain flat, at around $159 (against $158 in 2013)—a trend that should hold for the holiday shopping period. However, the ATP for fraudulent transactions so far this year has increased significantly, with an average increase of 38%. It has gone up from $272.71 in 2013 to $376.77 in 2014.
“This can largely be attributed to an increase in data compromises and account takeover fraud during 2014,” said Erika Gallo, director of global risk management at Retail Decisions, in a note to Infosecurity. “Essentially, greater access to valid and verified consumer data, from issuer and merchant established customer accounts, has given fraudsters greater confidence and an improved ability to successfully make higher-value fraudulent purchases.”
Also noteworthy is the increased popularity of the 'buy online and pick up in-store' phenomenon, which is growing 18% year-over-year. This option ensures that consumers don’t have to pay for (or wait for) shipments, or spend time in stores, locating their items. It is also extremely attractive to fraudsters who can also collect their orders within an hour of purchase, Gallo said — significantly improving their chances of evading detection.