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Retailers face a unique holiday shopping season. They must be aware of one major change in consumer behavior. An alarming number of shoppers are willing to break the rules in order to get illegitimate products at a discount or free, and this can severely harm online businesses.
eCommerce Fraud in 2020
A Signifyd survey found that 40% of U.S. consumers claimed that they falsely informed their credit card companies about a fraudulent charge for online purchases.
Consumers also reported other misbehaviors. Respondents reported that a significant percentage of them had taken advantage of promotions to obtain discounts they did not deserve. Similar numbers claimed they falsely claimed an item ordered online never arrived, or that the product arrived looking very different from what was online.
Retailers are anticipating big changes in how consumers shop for the holiday season as we enter the tenth month COVID-19 pandemic. Ecommerce orders spiked, and they have remained high despite brick-and mortar stores being reopened.
Safe in-store shopping
As merchants step up social distancing, signage, one-way aisles and exit-only doors, safety has become the new customer experience in shops. Face masks are distributed by associates. Many omnichannel retailers have significantly improved or launched their buy online, pick up in-store services. Added curbside pickup to fulfillment channels.
Retail is entering its most crucial selling season of the calendar year, and another danger could be ahead. While consumer abuse has been increasing for some time, it seems that many consumers have lost their sense of fair play due to the stress of job loss, lockdowns and the possibility of falling seriously ill.
“We have seen consumer abuse rise a lot lately. The pandemic has brought a lot to many people. Financial pressure seems to have led to moral compasses being re-evaluated.
Ryan Bermudez Signifyd Director Customer Success, East
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Of course, it is impossible to determine how much COVID-19, and the disruptions it has caused, have contributed to consumer abuse. Signifyd data indicates that the percentage of consumer abuse that involves false claims that a package arrived is up 39% compared to pre-pandemic levels.
There are also other indicators. Signifyd’s September survey of 1,500 U.S. customers, conducted by market researchers Upwave. 33% respondents admitted lying about packages not arriving or items that were not as described.
Signifyd asked customers in January if they’d ever claimed an eCommerce order never arrived. Only 8% replied that they did so to keep the product and receive a refund.
Although the question was slightly different than the one above, the differences in the responses speak volumes. It is a warning to retailers that they need to be more vigilant during the holiday season. This vigilance must also be applied to promotion abuse.
Signifyd’s September survey revealed that 31% consumers had violated discount or promotion rules, by, for example, claiming that they were making “first-time purchases” more than once to receive a price cut they weren’t entitled to.
Tips to Protect Your Store from eCommerce Fraud and Consumer Abuse
What can you do if you are a retailer facing increased consumer abuse? While some preventive measures may sound like something you learned in kindergarten, sometimes the best answers are right there.
Building good relationships with customers is the first line of defense against consumer abuse. According to Signifyd’s January survey , consumers are more likely to act badly if they feel treated badly. It can cause irreparable damage to the customer/retailer relationship if an order is not received on time, or if they aren’t kept up-to-date on slow orders progress.
It’s difficult for customers to cheat an individual or company they like. These tips will help protect your eCommerce store against customer abuse.
- Rich and precise product descriptions are essential.
- Get customer reviews from real customers.
- Communicate with customers and send order confirmations.
- Are you lacking fulfillment? Offer a discount on your next purchase.
- Refuse to accept chargebacks for consumer abuse.
- You might consider enlisting outside assistance, such as Signifyd’s Abuse Prevention solution.