Online fraud causes confidence gap between customers and retailers, study finds

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As ecommerce increased during the pandemic, so did fraud. According to a new survey by Riskified, in the U.S., more than three quarters (82%) of retailers said that they have seen an increase in fraud attempts since the pandemic began; promo abuse had the biggest impact (46%) on revenues, followed by account takeovers (43%).

Key findings from Riskifieds eConfidence survey, comprised of four thousand consumers and four hundred retailers.

Above: Key findings from Riskified’s eConfidence survey, comprised of 4,000 consumers and 400 retailers.

A confidence gap between retailers and consumers globally was also unearthed; more than half (55%) of all retailers said they were confident in their ability to prevent ecommerce-related fraud, even though only 34% of consumers trust in retailers’ ability to do so. On top of that, 40% of consumers place more blame on the retailer where their account was compromised than on the fraudster.

This information is critical for retailers to understand, as 66% of U.S. consumers said they wouldn’t buy online again from a shop where their account was compromised.

The impact of fraud on retailers’ bottom lines is severe, with 26% of global retailers saying that fraud is significantly damaging their profitability. Worse still, over one-third (34%) of global retailers said they had lost between 5% and 10% of their ecommerce revenue to fraud in 2020.

Merchants who opt to leverage fraud-prevention solutions, such as those offered by Riskified, will see increased trust and confidence with their customers, the report says.

Read the full report by Riskified.

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