Retail merchants experience around USD 100 billion in losses solely attributed to identity fraud, which escalate to USD 191 billion when factoring in the additional cost of lost and stolen merchandise. The study also found that merchant fraud losses amounted to more than 20 times the total value of consumer fraud victim losses, which totalled approximately USD 4.8 billion in 2008.
According to the study, retail merchants are absorbing the vast majority of the costs associated with fraud. Among the numerous fraud types affecting merchants, identity fraud or fraudulent transactions account for the majority of fraud-related costs, representing 52 percent of total fraud losses. In addition, certain merchant segments revealed a higher prevalence of fraudulent transactions such as large e-commerce retailers, of which 40 percent saw an upsurge.
Digital goods merchants attributed 54 percent of their fraud loss to unauthorized purchases, while merchants in telecom, social networking industries and online gaming reported 64 percent to 67 percent of their total annual fraud loss as the result of identity fraud.
The study was developed by provider of content-enabled workflow solutions LexisNexis in conjunction with Javelin Strategy & Research.
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