E-Commerce Up for Holiday Shopping, But Fraud Costs Also Spike

E-Commerce Up for Holiday Shopping, But Fraud Costs Also Spike

October 22, 2020

Global e-commerce transactions are predicted to rise 27 percent over the holiday period October 2020 through December 2020, compared to last year. The data, from ACI Worldwide, is based on hundreds of millions of e-commerce transactions processed by global merchants.

The research also forecasts a 40 percent increase in orders through buy-online-pick-up-in-store (BOPIS) or click-and-collect channels.

“Although a number of brick-and-mortar stores have closed due to the pandemic, their e-commerce sites remain available. On the other hand, some stores that have reopened haven’t seen much foot traffic due to consumers’ concern about large crowds. Therefore, as consumers spend more time at home, we expect BOPIS to be the primary delivery channel that consumers use to do their holiday shopping this year,” said Debbie Guerra, executive vice president at ACI Worldwide. “Moreover, as we head into the holiday shopping season, we see consumers beginning their shopping in early October as a result of concerns over inventory shortages, as well as shipment delays, but also because merchants are providing sales and deals earlier in the year.”

Global e-commerce transactions increased by 21 percent in September 2020 compared to September 2019, according to ACI’s data. But fraudsters continued to purchase higher-value items such as electronics.

“We expect the BOPIS delivery channel to grow for both genuine and fraudulent consumers as merchants both large and small continue to add this as a new option due to the pandemic,” Guerra said. “The accelerated use of digital payment channels due to the pandemic has resulted in both cross-channel journeys such as BOPIS as well as the blurring of the channels themselves—such as the usage of mobile devices and mobile checkout inside physical stores. This digital swing has opened a way to expand merchants’ market reach by enhancing the buying journey experience—but it also means more exposure to fraud, which merchants must be prepared for as we get further into the holiday season.”

Price Tag of Fraud Increases 

ACI data also found the transactional value of fraud attempts increased 0.4 percent in September, driven by purchases of electronics, with buy online, pick-up in-store being the channel of choice for fraudsters.

The average ticket price for fraud attempts increased by $9 in the period January through September 2020, compared to the same period in 2019. Non-fraud chargebacks increased by 12 percent in September 2020 compared to September 2019; this has been increasing at a declining rate based on months between March and July.

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Joan Goodchild

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