According to the report, total fraud losses increased 7% from 3.80% in 2016 to 4.09% in 2017. Losses during the holiday season were higher, with fraud increasing 24% from 3.07% in Q4 2016 to 3.83% in Q4 2017.
The beauty industry was hit hard, with fraud increasing 102% for online cosmetics and perfume retailers from 2.52% in 2016 to 5.10% in 2017. Online department stores also struggled, with fraud losses increasing 48% from 1.47% in 2016 to 2.18% in 2017.
For online department stores, account takeover fraud increased a whopping 285%, from 0.06% in 2016 to 0.23% in 2017, representing more than 10% of total fraud losses. For jewelry and luxury watch merchants, account takeover fraud increased 194%, from 0.42% in 2016 to 1.24% in 2017.
Through data analysis and hundreds of interviews with merchants, Signifyd noticed the following ecommerce fraud prevention trends:
Larger merchants outperform their smaller counterparts with higher acceptance rates and lower fraud losses
When merchants with popular products increase their marketing efforts, they may inadvertently be driving consumers to fraudsters offering these products on Amazon or eBay.
For merchants without machine learning, accepting thousands of orders in minutes can lead to hours of manual reviews and a great deal of chargebacks for fraudulent orders accepted during the flash sale rush.
The Ecommerce Fraud Index is based on global data culminated from billions of transactions across thousands of merchants. The data covers an eight-quarter period from Q1 2016 through Q4 2017 and is organized across eight major ecommerce industries including alcohol/tobacco/cannabis, apparel, consumer electronics, cosmetics/perfumes, department stores, furniture/appliances/home improvement, health/leisure/hobbies, and jewelry/watches/precious metals.
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