New post-holiday merchant data released by ACI reveals that fraudsters took advantage of retailers that offered buy online, pick up in store (BOPIS) during the 2018 holiday shopping season. As the following Business Wire item presents, the holiday grinches used stolen credit card data to make online purchases that they then picked up in stores.
New benchmark data from ACI Worldwide, a leading global provider of real-time electronic payment and banking solutions, revealed a 13 percent increase in fraud attempts in the ‘buy online pickup in-store’ (BOPIS) channel during the 2018 peak holiday season.
Based on hundreds of millions of merchant transactions, including some of the world’s leading global retail brands, BOPIS also saw consumer transactions peak at 20 percent right before Christmas as shoppers bought last-minute gifts before the holiday.
“As chip-and-pin credit cards are harder for fraudsters to replicate, it is driving them toward card-not-present, cross-channel fraud,” said Erika Dietrich, global director, Payments Risk, ACI Worldwide. “For example, fraudsters can use stolen credit card information to make a card-not-present purchase online and then simply walk in and pick up the item in-store. We’ll see this trend continue to grow in the coming years, and merchants will need to pay more attention to their omni-channel fraud controls.”
Principal findings from the data include:
- Overall volume of purchases increased by 16 percent, while overall value increased 9 percent compared to the same period in 2017
- BOPIS transactions increased 20 percent, peaking the weekend prior to Christmas
- Fraud attempts on BOPIS increased 13 percent
Payment card fraudsters will always find the path of least resistance and have discovered vulnerabilities in online purchases that are fulfilled via in-store pickup by the assumed buyer. But in some BOPIS purchases, the fraudster is the one picking up the merchandise. To compound the problem for merchants, the criminals can then make a return at another store and often get a gift card which can then be easily sold off. Lesson learned: merchants need integrated payment fraud detection systems that spot fraudsters before they can pull off their crimes.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group