Retailers around the world lose more than $100 billion in lost revenue each year due to consumer fraud, according to a study by anti-fraud firm Riskified.
As part of the survey, Riskified conducted a survey of 300 retailers from different countries. Each participant's income exceeded $500 million.
A number of companies are noting a growing number of violations of retail rules by customers. The most common cases include fraudulent returns, using fake accounts to get multiple discounts, and using bots to buy limited edition items for resale at a higher price.
Thus, one of the companies participating in the study lost more than 14 million potential revenue in one year due to the actions of 4 thousand unscrupulous customers who created 137 thousand accounts to take advantage of the 35 percent discount available on their first purchase in a store.
Another retailer lost more than $3.5 million in the first quarter of this year after a small group of serial scammers were able to use promotional codes for a 35% to 50% discount several times.
Fake ads for cheap goods can lead to draining of bank cards
About 90% of companies participating in the Riskified survey note that favorable return policies and various promotions aimed at stimulating sales and increasing customer loyalty are an important part of their business strategy.
However, the increasing abuse of such opportunities over the past year has caused very significant damage to the majority of retailers (55%) and forced them to reconsider their policies regarding customer-oriented offers against the backdrop of already high costs.
In response to fraud, companies are tightening controls over customer behavior. In particular, 65% of respondents said that they manually process the majority of product return requests, despite the high cost and labour intensity of this process.
ThredUp, which owns a second-hand chain of stores, has set up a dedicated anti-fraud team to monitor accounts and verify other customer information. Additionally, ThredUp recently introduced a program that allows customers to receive credit for future purchases in exchange for non-return of previously purchased items.