ATLANTA — LexisNexis® Risk Solutions has released its 11th annual LexisNexis Risk Solutions 2020 True Cost of FraudTM Study: e-Commerce/Retail Edition. The study that surveyed risk and fraud executives at e-commerce and retail companies in the U.S. and Canada reveals that fraud continues to increase and most acutely affects mid to large-sized e-commerce and retailers. Retailers experienced increased online and e-commerce fraud volumes and monetary losses correlating to a mass shift to online and mobile transactions during the COVID-19 pandemic.
The result of increased fraud volumes translates into a 7.3% increase in the cost of fraud year-over-year for U.S. e-commerce and retail merchants. The LexisNexis Fraud Multiplier℠ – the total amount of costs related to fees, interest, merchandise replacement and redistribution per dollar of fraud for which the merchant is held liable – shows fraud now costs companies $3.36 for every dollar lost to fraud compared to $3.13 in 2019 and $2.40 in 2016.
The True Cost of Fraud Study is a comprehensive survey that compares fraud rates, impacts and challenges related to fraud detection and prevention year-over-year and during COVID-19.
Key Findings and Trends from the Study
“Retailers and eCommerce merchants should be prepared for increased fraud attacks and costs for the foreseeable future,” said Kimberly Sutherland, vice president, fraud and identity management strategy, LexisNexis Risk Solutions. “It is unclear how the COVID-19 pandemic will shape the purchasing landscape over the next few years, although we do know that fraudsters will continue to shift tactics quickly in response. The most effective way for businesses to fight fraud and protect their consumers is by performing a more complete assessment, combining physical and digital identity data of those making purchases.
“High fraud costs impact e-commerce merchants and retailers as sophisticated threats increase,” Sutherland continued. “A multi-layered strategy can protect retailers and e-commerce merchants throughout each buyer experience. Every transaction channel and type carry unique risks. Using different solutions to support fraud detection at various points in the consumer journey will strengthen overall defense.”LexisNexis Risk Solutions 2020 True Cost of Fraud Study: e-Commerce/Retail Edition Methodology
Download a copy of the 11th annual LexisNexis Risk Solutions True Cost of Fraud Study: e-Commerce/Retail Edition and join our webinar with Chris Schnieper, director of fraud and identity at LexisNexis Risk Solutions, on July 29, 2020 at 2:00 p.m. ET (U.S.) for an in-depth look at the study.
About LexisNexis Risk Solutions
LexisNexis Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information and analytics for professional and business customers across industries. For more information, please visit www.risk.lexisnexis.com and www.relx.com.