Introduction

Shoppers are increasingly turning online for their retail shopping, and this is especially true in the case of consumer electronics. While online sales made up around 8% of overall US retail sales in 2015, consumer electronics online sales had already accounted for 25% of sales two years earlier. The future looks bright as well: US online consumer electronics sales are expected to continue growing by over 12% YoY, and are projected to surpass $100 billion by 2018.

While it’s a great time to be an online consumer electronics retailer, the vertical still faces unique challenges when it comes to balancing online sales and fraud. For starters, the term “consumer electronics” covers a very wide range of products: the risk associated with selling a dishwasher differs dramatically from that of selling a laptop computer or a digital camera. Unfortunately, many retailers rely on fraud filters and rigid fraud prevention rules that don’t take into account the variance in fraud rates across items.

Another dilemma retailers face is that expensive electronics and trendy gadgets are coveted by fraudsters. In the case of “grey” orders that are not obviously legitimate but aren’t clear cut fraud, retailers are forced to choose between approving a risky order and potentially getting hit with a hefty chargeback, or declining the order and possibly losing both the immediate revenue and the lifetime value of a good customer.

Since electronic devices appeal to a tech savvy crowd, the fraudsters who target these products online tend to be more sophisticated as well, making it harder to detect and prevent their fraud attempts without advanced technology.

Riskified helps dozens of consumer electronics merchants manage their fraud operations, including Abt, ePrice, Digital River, Alcatel, and Skullcandy, to name a few. We analyzed an extensive database of online consumer electronics purchases to reach insights into the online shopping patterns of consumers across the globe. In this report, we share some traits that characterize safe and risky shopping patterns, so retailers can optimize and streamline their order review process and provide consumers with a better shopping experience.