Fraud doesn’t spread holiday cheer – the Naughty and Nice of online retail….


In an increasingly digital world, more and more people are shifting online to accomplish their shopping. And with the holidays quickly approaching, gifts are on everyone’s mind. While in store shopping is still predominant due to a longstanding tradition of sitting on Santa’s knee, many Americans are looking for ways to reduce holiday stress, and online shopping is a growing popular option.

Online retail is expected to grow to about nine percent of all holiday sales this year. While nine percent may not sound like much, it translates to $79 billion spent in two months. But that’s not the only number that’s growing. As consumers – or the nice – turn to new channels so do fraudsters. And with EMV technology securing face-to-face transactions, eCommerce is the next weakest link and a growing major monetary target for the naughty. Online fraud is expected to jump 106% by 2018, bringing the total cost of card-not-present fraud to $6.4 billion.

More and more people are being impacted by fraudulent activity, however if you’re like me, these numbers don’t mean much to you. Yes, they sound scary, but they’re also so large that they’re intangible, unable to translate to the average person. So let’s break it down a little further.

When interviewed, people planned to spend an average of $861 on Christmas gifts. If we use the numbers above, $77.49 of that will be spent via an online channel. Experts estimate eCommerce fraud accounts for 0.9% of revenue, meaning that about seventy cents of your purchase will be fraudulent. Doesn’t sound like too much, does it? But when each of the 319 million people in the US loses seventy cents to fraudsters, that amount quickly rises to an already insurmountable sum that will increase to over $4.5 million dollars by 2018. And that’s just during the two biggest shopping months of the year. So what does that loss represent to our holiday cheer?

That’s 1,133,000 bottles of egg nog.

Or 3,486 new MacBooks.

Or for the ultra-nice, sponsorship of 90,640 Salvation Army Angels.

In the end, the holidays are about giving back, and without fraud in our lives, the season could be infinitely more joyful.


To learn how about what can be done to secure online shopping, watch my recent webinar with American Banker and hear how DCV can start to fix the eCommerce/CNP fraud problem.

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