Security & Fraud

Increased Fraud Turns Retail Holiday Cheer Into Holiday Horror

Radial Holiday Fraud Index

Omnichannel commerce technology and operations provider Radial released the results of its Annual Holiday Fraud Index today (Nov. 18), which revealed the ongoing risk retailers face of coordinated and sustained fraud losses.

“With more than 10 years in fraud management and billions of transactional records to pull from, Radial is in a unique position to leverage our expertise and data to identify high-risk factors for retailers,” Stefan Weitz, chief product and strategy officer at Radial, explained. “We’re heading into our second holiday season with more retailers EMV ready, which means CNP fraud becomes a lot more attractive to organized and tech-savvy criminals. Combine that with the increased prevalence of data breaches and retailers are faced with the daunting challenge of approving as many orders as possible, while minimizing fraud. Bottom line for most retailers if you are managing fraud yourself, you are going to get wrecked.”

In 2016, there have already been more than 2 billion records stolen, and the increasing occurrence of hacks, leaks and data breaches show now sign of slowing down.

Radial’s Annual Holiday Fraud Index highlight six key findings retailers should keep in mind this holiday season and beyond:

  1. The largest segment of fraudulent activity is CNP fraud and fraud attacks have continued to rise in nearly every market sector. On average, Radial observed a 30 percent increase in online fraud attacks across its client base. Electronics, Entertainment and Jewelry market segments experienced the biggest impact.
  2. While some cross-border countries present a greater fraud risk, others offer increased sales potential. The highest cross-border eCommerce attack rate belongs to Venezuela, which came in at around 17 percent, while Korea and China account for more than 78 percent of sales during the holiday season.
  3. Cyber Monday usually sees a significant drop in cross-border fraud attack rates.Retailers can approve up to 98.59 percent global eCommerce orders on Cyber Monday, which surpassed $3.8 million for Radial clients last year.
  4. After Dec. 25, digital gift card fraud spikes.These attacks are 10 times more likely to take place during the holidays compared to other payment methods, but it jumps to 25 times more likely the week after Christmas.
  5. Certain billing and shipping domains and payment tenders see a massive jump in digital gift card attacks during the holidays.
  6. The risk factors for digital gift card purchases can vary based on IP locations and credit card bank identification number (BIN). Credit card BIN and IP country can have huge impacts when accessing risk.

“It’s peak season so we know retailers are going to see significant spikes in order volumes. Right alongside that though comes increases in fraud attacks,” Weitz continued. “Retailers must be on alert and be able to protect their customers, but they also need to protect their bottom lines. Killing too many good orders can result in millions of lost dollars. It’s an insanely tricky thing for a retailer to balance.”



Digital transformation has been forcefully accelerated, but how does that agility translate into the fight against COVID-era attacks and sophisticated identity threats? As millions embrace online everything, preserving digital trust now falls mostly on banks and FIs. Now, advances in identity data and using different weights on the payment mix afford new opportunities to arm organizations and their customers against cyberthreats. From the latest in machine learning for fraud and risk, to corporate treasury teams working in new ways with new datasets, learn from experts how digital identity, together with advances like real-time payments, combine to engender trust and enrich relationships.

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