The global eCommerce market is booming, and consumer electronics are leading the way. By 2018, online consumer electronics sales are expected to reach $108.4 billion in the US alone. But a surge in online sales present not only opportunity, but new challenges as well, including preventing Card Not Present (CNP) fraud.

Effectively preventing CNP fraud requires familiarity with both safe and fraudulent online shopping patterns within the industry. Riskified provides fraud management services to dozens of consumer electronics retailers across the world, including Abt, ePrice, Digital River, Alcatel, and Skullcandy. We analyzed our data and put together a report specifically for consumer electronics retailers, providing insights and best practices for detecting fraud while maximizing online revenues. In this post, I share some of the findings that appear in the full report.

Fear Not: The Holidays Are Safe

The winter holiday season, and especially Black Friday and Cyber Monday, are extremely significant for most consumer electronics retailers. Media reports and some fraud prevention vendors may lead merchants to believe that fraud teams should get into defensive mode ahead of the holiday season. However, Riskified’s data reveals that fraud actually remains constant during the holidays. As order volumes spike and more legitimate consumers shop online, the rate of overall fraud actually decreases during the holiday season!

The rate of overall ecommerce fraud rate actually decreases during the holiday season

Not only does the rate of fraud drop by 50% during top shopping days such as Black Friday and Cyber Monday, but also every online purchase of consumer electronics is worth up to 30% more! The lesson is quite clear – retailers need to learn legitimate holiday online shopping patterns and automate as much of the fraud review process as possible. Doing so should boost the accuracy and scalability of internal fraud operations, making the holiday season more profitable with fewer false declines and more happy customers.

Gauge Your Merchandise’s Fraudster-Affinity

The key to maximizing holiday season sales is automating and streamlining the post-checkout process, including fraud review. Automating the process requires familiarity with the shopping patterns of both good and fraudulent consumers. This includes knowing which purchases require more scrutiny and which items are more likely to be targeted by fraudsters.  

Establishing a product-specific risk profile can help retailers know which online orders should be scrutinized more closely. Our data confirms what retailers know: large appliances, such as refrigerators and washing machines, are seldom the target of fraud attempts, while handheld devices, such as tablet computers and GoPro cameras, are coveted by fraudsters.


So why are handheld, high value electronic devices so attractive to fraudulent elements? Their small size allows for easy shipping and their high cost translates into more profit for the fraudsters who resell them. Of course, fraudsters are influenced by demand on the market. If a device is new or sought-after and shoppers are willing to pay high prices for it, fraudsters will target it. Case in point – hoverboard and drone sellers are constantly hit with fraud attempts, and one can imagine that the same will happen to retailers selling the new iPhone 7 and air pods.

However, even online purchases of devices with a relatively high fraud rate are still mostly safe. The data shows that 88 out of every 100 GoPro purchases are absolutely legitimate. While it is useful to know which items are more prone to fraud attacks, it is never a good idea to reach a decision regarding an order based on a single data point.

Download The Full Report

This was just a small taste of the data included in our special report about CNP fraud in online consumer electronics sales. The report includes stats and insights on mobile commerce penetration and fraud rates, the rate of fraud associated with shipping options such as in-store pickup, the importance of international cards, and more. For more insights and fraud prevention best practices, read the full report.