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The madness has already started, hasn’t it?
Christmas is in the air and Thanksgiving hasn’t yet reared its familiar, familial head.
Yet retailers are already pestering us with online enticements for things we don’t need and neither do the people for whom we’re buying the gifts.
But this is America. It’s not about need; it’s about excitement.
For online retailers — which is almost everyone these days, surely — the holidays also signify the excitement of increased fraud.
When trade volumes go up, so do attempts at naked theft.
That’s what you’d expect, at least.
Yet I’m currently bathing in a bracing report that suggests online fraud during the holidays isn’t quite what one might imagine.
Riskified — a “payments and fraud-prevention solutions provider,” because “payments and fraud-prevention problems provider” isn’t a good business — took a look at tens of millions of online transactions performed by its clients.
Then it dutifully presented its conclusions in a report enticingly entitled Unwrapping Holiday Fraud.
And peculiar conclusions they are.
First, Riskified insists there’s no such thing as the holiday season. Instead, it identified six distinct seasons within the holiday period.
You’ve missed the first one. It was between Oct. 24 to Oct. 31.
Electronics purchases, for example, show a considerable spike in this period. Then there’s this delightful nugget: “Merchants across all industries can expect to see a revenue spike, up to 30% higher than non-season averages during the last week of October, save for Halloween, when sales are actually slower.”
These shoppers are, apparently, the real planners.
The next little season is Nov. 1 to Nov. 22.
This is a blissful period because it includes China’s Singles Day on Nov. 11, as well as Amazon and eBay’s presales.
A glorious essence from this period, according to Riskified: “Shoppers are spending more at this point in the holiday season than in any other holiday sub-season, especially on physical goods. So, it’s important to note that higher value orders, although sometimes regarded as riskier, are safe and common during this time of the year. Towards the end of this sub-season, as merchants begin to roll out early Cyber Week deals, self-gifters and deal seekers join the mix.”
Cyber Weekend, Nov. 23 to Nov. 27, is the third season. Who are the biggest shoppers? Why, those self-gifters. Perhaps they need psychological bolstering before Thanksgiving.
Then there’s Nov. 28 to Dec. 23. This is what Riskified identifies as Pre-Christmas. It’s all about gift-givers. Says the company: “It’s the holiday sub-season with the lowest rate of international shipping. This, however, doesn’t mean there are fewer international customers: their volume is still about 30% higher than average, they just tend to ‘get lost’ amongst the huge influx of domestic shoppers.”
The more I read, the more I found myself learning a lot about humanity.
Season number 5 is Dec. 24 to Dec. 25. These are the panicked buyers who know they must buy digital goods, such as digital gift cards, those especially thoughtful gifts.
Finally, there’s Dec. 26 to Dec. 31. This is the time where everyone is looking for a bargain because everyone knows retailers are trying to get rid of inventory.
Which leads us to the other delightful aspect of humanity: Fraud.
Here’s one sentence from the report that rendered me oddly twitchy. Referred to the six seasons as a whole, Riskified concluded: “The rate of fraud attempts remains on par with non-season averages, but the increased volume of sales means there’s an increase in the volume of fraud attempts, as well.”
In essence, then, all these holiday mini-seasons don’t seem to attract fraudsters in unusual numbers.
Riskified suggests retailers should consider that a higher volume of international orders in the earlier periods don’t necessarily suggest a higher rate of fraud either. They’re just people who have friends and relatives in other countries.
Moreover, in the Nov. 1 to Nov. 22 period shoppers are spending more. Says the report: “It’s important to note that higher value orders, although sometimes regarded as riskier, are safe and common during this time of the year.”
So when do the fraudsters really weigh in? Other than all the time, that is.
It seems the rate of online shopping fraud attempts is highest in the tiny window of Dec. 24 to Dec. 25. This is principally, says Riskified, because the volume of legitimate shoppers has shrunk. Yes, the fraudsters don’t take days off. Not even for Christmas.
Their methods, though, are fascinating. Psychologically, that is: “Amongst these legitimate customers hide the fraudsters who focus on phone and chat orders — any order method that requires human assistance, as fraudsters know that customer service teams are exhausted so late in the holiday season.”
They pounce on the tired and huddled online customer service people who just want it all to stop.
The report does add that digital goods fraud is highest in the Dec. 26 to Dec. 31 period. Could this be because the fraudsters are so busy doing their jobs that they’ve forgotten to get their loved ones’ gifts?
But what, I hear you cry, about mobile apps? Aren’t they trouble?
Not so much, according to this report. At least, not so much during the holidays: “Mobile apps, a relatively riskier segment throughout most of the year, prove to be very popular with legitimate shoppers during the holiday season. Throughout all sub-seasons, mobile app orders typically experience 70% fewer fraud attempts than the non-season average, putting them on par with desktop orders.”
Though this report has some oddly reassuring conclusions, I’m still suspicious. It’s as well to be careful out there if you’re an online retailer and extra-careful at this time of year.
For many retailers, this period signifies a major element of their revenue.
If you’re a retailer, you don’t want to mess up that revenue. You’ve got your own gifts to buy and people always expect you to get them something nice.
After all, you’re a retailer. You get a discount, right?