How Porch Pirates Subtly Steer E-commerce

While we tend to associate high-tech fraud with eCommerce thieves, as it turns out, it’s a big ecosystem with room enough for good old-fashioned, smash-and-grab types ready to snatch your latest purchase off your doorstep. And, by the data, it’s a big concern for consumers, limiting their eCommerce spend.

When most people picture the kinds of fraud and theft eCommerce had a tendency to attract, the popular mental image is of a fairly high-tech enterprise — hackers, crackers and data jackers vacuuming up card information en masse and either selling it to the highest bidder or using it to snag themselves some unearned lucre.

And while the cybercriminals of the world certainly have managed to capture our collective attention — not to mention our passwords, social security numbers and card data — it seems fair to remember that eCommerce is a big ecosystem and has room for thieves of all kinds.

Even porch pirates, for example.

For those who’ve never had the experience of being the victim of a backdoor buccaneer, it is quite simply when one orders a package online, sees the notice of a delivery, but when you get to the place on the porch where it is supposed to be — nothing. The pirates have pillaged, and whatever the consumer just ordered from Amazon is their booty.

It is easy to overlook the efforts of the lower tech thieves of the world. They lack bot armies, custom POS scraping software or cool names like Operation Deep Panda — or Vladimir Putin comparing their crimes to works of art. They probably don’t even know what bitcoin is or that all the cool thieves are using it these days.

But, according to new data out from Shorr Packaging, perhaps porch pirates don’t really need all those bells and whistles — even if all the other cyber thieves don’t think they’re cool.

Because what the low-tech, smash-and-grab experts patrolling the high seas of the suburbs have is reach: Between 5 and 10 percent of consumers report fraud when their cards have been used by the criminals who stole them — as opposed to the 30 percent of consumers who report having lost a package to a porch pirate.

And the fear of theft has an effect on consumers, what they will buy and how they will shop — thus impacting the online shopping ecosystem through and through.

By the Numbers

That consumers like online shopping is probably not much of a headline these days, but Shorr Packaging’s figures confirm just how much digital shopping consumers are doing — and where they are doing it.

According to the figures in consumer spending, 78 percent of customers shop online one to two times per month (37 percent of consumers shop online one to two times per month, 41 percent, three to five times per month); 17 percent shop six to 10 times online per month, while 5 percent, 11 times or more online.

Folks in the suburbs are the bigger online spenders at $227 in digital shopping purchases per month on average — rural and urban online shoppers spend essentially the same amount per month on the web — $186 and $187 respectively.

Regionally, shoppers in the Pacific Northwest are the leading spenders online — averaging $251 per month — though surprisingly, the Northeast does not take the number two spot on the list with its $203 average. The southeastern United States captures that crown, with an average monthly spend of $238.

Somewhat less surprisingly, the most affluent tier of shoppers surveyed were the biggest spenders; those who make over $100K per year spend the most per month, with an average of $298.

Interestingly though, the second-highest spend was not in the second-highest income group, or even the third. Consumers in the earnings trench second from the bottom in the survey — those who make $30K-$50K per year — were the second place in the spend category, dropping $220 per month on average with digital purchases (edging out the average $207 spent by those who make $50K-$75K per year, and the $213 spend by those who make $75K-$100K).

The Porch Pirate Problem

The vast majority of respondents — 92 percent — noted that they prefer to get packages delivered to their home. Despite that preference, however, 35 percent noted they’ve had a package sent elsewhere due to concerns that the item would not be safe. Over half, 53 percent, noted that they had changed or arranged their plans around waiting for a package delivery, despite the fact that they didn’t need to sign for it.

This stat, however, did change some depending on the age of respondent. Millennials and Gen Xers are particularly concerned about their packages being boosted; Baby Boomers rarely change their plans to wait for the mail.

And fear of a theft doesn’t just change what consumers do to receive their packages — it also influences what they by. Among respondents, 41 percent of respondents don’t buy certain items online because they’re afraid the packages will get stolen.

The number one item they avoid? Electronics — which tend to attract thieves like honey attracts flies — has 44 percent of respondents preferring to skip the delivery. Collectables, clothing and jewelry were also items to avoid. It should be noted, however, that a full third — 33 percent — are pretty much fearless and are unconcerned about ordering any good or category of good online.

But consumers are clearly concerned about the cost of goods that are ending up on their doorstep. Among those surveyed, only 1.5 percent reported having ever bought an object that costs more than $5K online; 57 percent, on the other hand, reported $500 or less being the maximum amount they’ve ever spent online. Men seem to be a bit more open to bigger digital spend then women — the average top spend for men online is a little north of $1,300; for women it is a little bit below $1,000.

And consumers are expecting online retailers to do more to prevent issues — with 61 percent reporting they didn’t think retailers were doing enough to prevent fraud, noting that they could package boxes more discretely so their contents aren’t obvious (and appealing to potential thieves), placing them in more discreet locations or using GPS tracking on packages pre-delivery.

And, notably, not making those changes can cost online retailers. They have feedback — 47 percent of respondents have noted that they have passed on a transaction because the retailers’ packaging was not discreet enough to prevent theft. With concrete consumer insights like these, how could you not?

The moral of the numbers?

Cyberthieves may get the big news headlines — whereas analog larceny doesn’t quite pack the same exciting punch. But porch pirates, low tech though they may be, are having big effects on consumer spending and are taking a bite out of retailers’ bottom lines, even if they don’t know it.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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