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Fraud Attempts Increased this Holiday Season for Digital Download, In-Store Pickup and Overall

Benchmark data of top global retailers from ACI Worldwide along with data tracked by the eBay Enterprise Holiday Fraud Index show apparent strategies and key dates where types of fraud attacks spiked during the holiday season, while overall fraud attempts between Thanksgiving and New Year’s Eve increased by 8 percent compared to 2014.

Merchants with any experience selling goods or services online are aware that eCommerce fraud tends to increase during the holiday season when overall transaction volume is higher as well. Recent data published by ACI Worldwide and eBay go beyond this, however, tracking when fraud rates spike on specific days and what types of products or delivery methods are being targeted. ACI found that fraud attempts really peaked toward the end of the holiday season, when the fraud attempt rate reached 2.4 percent on Christmas Eve.

eBay also noted a significant spike in fraud attempts on Christmas Eve, particularly on orders with overnight shipping, which nearly had a 5 percent fraud attempt rate. This is clearly intentional as fraudsters know that many last-minute shoppers will be using rush shipment as well. ACI found that over 8 percent of overnight delivery order attempts were fraudulent this holiday season.

Behind Christmas Eve the fraud attempt volume was highest on Thanksgiving (2 percent) and Black Friday (1.8 percent), according to ACI. Holiday season eCommerce transactions increased 21 percent from 2014, and although fraud attempts increased as well they couldn’t keep pace increasing just 8 percent.

ACI also reported that the delivery method most frequently targeted with fraud was digital download orders, such as e-gift cards, which had a 15 percent fraud attempt rate this holiday season. Interestingly, eBay notes a distinct pattern with fraud attempts targeting e-gift cards spiking on the first couple days after Christmas and again around New Years. With many customers making returns and exchanging gifts for gift cards, fraudsters may be trying to hide under the radar with all the other gift card transactions occurring.

Other types of fraud ACI tracked with their global retailer benchmark data include international orders, which had an 11.65 percent fraud attempt rate this holiday season, and buy online / in-store pickup orders, which had a 2.8 percent fraud attempt rate this holiday season. While the in-store pickup fraud rate is much lower than with overnight shipping, digital downloads or international orders, it represents nearly 50 percent year-over-year growth in the fraud attempt rate for this channel.

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