We all love a bargain, but so do fraudsters

The success of Amazon’s recent Prime Day - this year over 250 million items were sold worldwide - typically results in many other merchants promoting similar sales events. With many merchants hoping the marketing strategy works out for the best.

Unfortunately, this presents a multitude of challenges. Not just the need to prepare well in advance for the huge surge in sales volumes. Merchants also need to keep a watch out for opportunistic fraudsters.

Identity fraud management with sales peaks

There are a number of risks associated with fraud around sales peaks. In fact, our research found that there was a 27% spike in fraud attempts by volume for Prime Day this year, compared to 2020. In most cases, fraudsters will hide among the unusually high volume of shoppers and take advantage of consumer purchasing patterns, which is significantly different to non-peak days.

With an odd mix of consumer purchasing behaviour - clothing in the morning and a new TV in the afternoon - this presents a window of opportunity for fraudsters to strike. So it’s critical that merchants can differentiate between a fraudster and a customer and shut down any fraudulent transaction while allowing genuine customers to make the most of the sales offers, without any friction.

Fraud strategies that include incremental machine learning technology, can help retailers understand both genuine and fraudulent spending behaviours. By leveraging artificial intelligence in this way, retailers can become more efficient through high acceptance and low chargeback rates with zero friction.

Preparing for peak trading

Globally, eCommerce volumes are up 20% year on year from 2019 to 2020 and the jump is even higher in certain sectors. Gaming saw a 90% increase in 2020 and retail enjoyed 48% growth. Add to that a spike in sales of 6% by volume and 18% by value during this year’s Prime Day compared to 2020, and it’s clear why a robust and scalable eCommerce payments setup is essential.

Consumers are demanding a variety of payment experiences and merchants need to respond - as denying customers the seamless payment experience they want and expect can make or break a sale’s success.

Mobile commerce, for example, has truly become mainstream. In fact, our data found that 30% of all eCommerce transactions were on a mobile device in 2019, and this year mobile commerce is expected to jump to 72% of all eCommerce retail sales. Mobile fraud attempts will also rise with this shift. So to make the most of the peak trading days, merchants need to ensure website responsiveness and an easy, fast and frictionless mobile checkout experience.

While sale events - especially Prime Day - can be exciting for both consumers and merchants alike, ensuring fraudsters have no part in it is key to staying profitable.

Going forward, merchants should prepare for peak sales throughout the year so that they are well prepared in advance for big events - such as the much anticipated Cyber Monday and Black Friday - so that they will always be ready to lead in sales, and reduce any type of fraud.