The Guardian this week reported record sales in the UK across the four day festive shopping extravaganza between Black Friday and Cyber Monday. Shoppers spent around £3.5 billion online, grabbing the biggest deals and discounts with the simple click of a button. Soaring e-commerce rates have forced many retailers on the high street to extend their promotions over the next week to try and increase revenue.
With so much commerce online, shoppers have become increasingly reliant on technology. The simplicity of being able to enter your card details and make a quick purchase makes the option of online shopping all the more appealing. While the seasonal spikes in digital spending may be positive on the surface for merchants, the hidden consequences can cause major damage.
Chargebacks are one of the biggest hitters for merchants, with an alarming 86% of cardholders initiating a chargeback without ever giving the merchant an opportunity to resolve their claim. A high number of chargebacks filed over the festive period will be fraudulent- many of which are known as “friendly fraud” where a customer goes direct to their bank claiming they never initiated their transaction. Typically customers will file a chargeback 60-90 days after the transaction, meaning most merchants will not realise the financial damage until the New Year.
Black Friday and Cyber Monday opened the door for fraudsters. Online merchants risk expensive fraud losses and losing customers if they fail to implement the correct fraud prevention techniques. All of which makes a significant negative impact on ROI for all the hard work dedicated to marketing and merchandising ahead of the busy season.
Global Risk Technologies™’ latest exclusive whitepaper offers an in depth explanation of Black Friday in the UK, and provides merchants with information on how to identify risks and prevent unnecessary losses. It is vital merchants and retailers wake up to the problem of friendly fraud and protect themselves from the risk of chargebacks and reputational damage.
