The study was conducted by LexisNexis Risk Solutions and includes a survey of over 1,000 risk and fraud executives in ecommerce and multichannel retail organizations, and details current trends in retail fraud and the effects these have on the ability of merchants of all sizes to prevent and detect fraudulent transactions.
According to the report, chargebacks remain high among remote channel merchants and small domestic merchants, with a 49% increase, for example, among ecommerce merchants. Credit cards remain the most common method of payment for fraud, with 41% to 63% across all merchant categories, presenting a particular challenge to mobile commerce merchants.
The LexisNexis Fraud Multiplier estimates the total amount of loss a merchant incurs, based on the actual dollar value of a fraudulent transaction. In 2016, every dollar of fraud cost merchants USD 2.40, up from USD 2.23 a year ago. The percent of revenue lost to fraud continues to increase, hitting mcommerce and international merchants the hardest at 1.69%.
Aaron Press, Director of ecommerce and Payments at LexisNexis, said that merchants leveraging remote channels experience a disproportionate amount of fraud, and they are especially challenged in the mobile channel. He added that taking a comprehensive look at fraud prevention best practices among remote channel merchants, there are some advantages in taking a multi-layer approach, shifting spend toward automation and away from high levels of manual reviews.
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