The Consumer Outlook on Ecommerce Fraud

In 2020, ecommerce sales accounted for 18% of all retail sales worldwide, a steep increase from the year before, which was 13.6%. The share of ecommerce sales is expected to reach 19.5% by the end of this year, and 21.8% in 2024.

As the ecommerce industry continues to rapidly expand, consumers’ awareness and concern of ecommerce fraud has sharply increased. Over half of retailers in the UK believe they are doing everything in their power to prevent ecommerce fraud, but only 17% of UK shoppers share this confidence.

The new European and US data released by Riskified, a fraud prevention and ecommerce support solution provider, highlights the clear disconnect between retailers and buyers on the topic of online shopping fraud.

The study included the online shopping experiences of 4,000 consumers and 400 retailers in the U.S., U.K., France, and Germany. It also showed the prevalence of online retail fraud, the extent of its lasting financial impact, and the contrasting perception of buyers and retailers on the matter.

The study found that just 55% of all online retailers were confident in their ability to prevent ecommerce related fraud, and only 34% of all consumers confirmed that they could confidently trust their favourite online retailers to keep their details and accounts safe from fraudulent activity.

Moreover, in the UK specifically, 27% of online consumers said their concerns over online shopping continue to grow as awareness and evidence of ecommerce fraud rises, and 51% of the consumers interviewed believe that ecommerce retailers will find it continually more difficult to prevent fraud in the years to come.

In addition to this, the threat of fraudulent ecommerce activity poses prominent risk to the image and success of many online UK retailers, as consumers are now far more likely to only go through with online transactions where they feel confident that their online safety will not be compromised. Not only did 39% of UK consumers say they would blame the retailer if their account was subjected to fraudulent activity, but 67% said they would not buy online again from a retailer where their account was in any way compromised. There is now great pressure on retailers to protect their online customers, and to implement the best practices possible to reduce all risks of fraudulent activity.

Unfortunately, in the UK alone, a staggering 82% of retailers reported that they have witnessed an increase in ecommerce fraud attempts since the pandemic began, with Card Not Present (CNP) fraud having the biggest negative impact on revenues and accounting for 60% of all recorded fraudulent activity.