Help your fraud team prepare for another wild holiday shopping season!
The holidays are only a few weeks away, and fraud teams are gearing up for yet another record-breaking season; sales forecasts call for a 10% to 16.6% volume increase over last year. To help fraud teams prepare for the order surge, we took a close look at last year’s holiday shopping and fraud patterns. Here’s what we found.
1) Black Friday order volume is 4-5 times higher than average.
But the rush isn’t limited to major shopping holidays–last year every day between November 15 and the end of December had well above average order volume.
Expect order surges – even during “off” days:
2) Every day of the holidays is safer than average.
It may not surprise merchants to hear that the holiday sales volume dilutes the number of fraud attacks, boosting approval rates. But even on interim days during this season you should be able to approve orders at (at least) a 2% higher rate than usual.
Riskified approval rates – 2016 Holidays:
3) The biggest purchases of the year come before Black Friday.
Although the number of orders on Black Friday is the highest of the year, the average dollar value of a purchase is actually much higher on the days preceding it–on the Wednesday before Black Friday the average cart value is over $400.
Cart value is highest the Wednesday before Black Friday:
4) Expect a surge in international orders before Black Friday.
One reason the Wednesday and Thursday before Black Friday have such pricey carts is that a high share of these orders are cross-border (38% and 35% respectively). International orders placed in mid-November tend to be legitimate. To ensure you get the most out of this period make sure your fraud team is up to speed on global fraud trends, understands the legitimate reasons international shoppers use reshippers, and that you’re not automatically declining or flagging all cross-border orders.
Cross-border: safe before Black Friday, risky around Christmas
5) Customers shell out for expedited shipping over the holidays.
During the year, expedited shipping makes fraud more likely, since fraudsters don’t mind the additional expense as much as real cardholders. But it’s a totally expected behavior during the holidays. In fact, on the day before Christmas nearly 10% of orders have rushed shipping, and we easily approve 93% of these.
6) The night before Christmas is a scramble for digital gift cards.
People still seem to prefer giving and receiving physical gifts during the holidays, but last-minute shoppers are often left with no choice but to go digital. As you can see below, well over 30% of orders placed the day before Christmas are for digital goods.
The thing that’s tricky is that while digital orders are quite safe around both Black Friday and Christmas, they are risky in the period between. Proceed with caution.
Last-minute shoppers buy digital goods:
7) Holiday shoppers avoid “buy online, pickup in store”.
It’s not surprising that people prefer having their orders shipped rather than face the holiday crowds. But that doesn’t mean that you should be wary of all these orders–on New Year’s Eve in-store pickup is safer than it is year round. However, we do see unusually high fraud rates in these orders on the day before Christmas–likely because fraudsters try to take advantage of the hectic shopping environment.
8) The rate of mobile orders is 10% higher during the holidays.
Customers shop on their phones while browsing in physical stores in order to avoid crazy lines. Plus, people are often traveling during the holidays, and are more reliant on phones and tablets. During this period, it’s especially important that your fraud review systems are able to identify mobile orders and process them accordingly. As you can see, weekends have much higher mobile rates since people are away from their work computers.
Shoppers use mobile over the holidays – especially on the weekends:
Riskified wishes you a successful, fraud-free holiday season!
Research for this article contributed by Emilie Grunzweig