Riskified Holiday Fraud Study Top Categories Cosmetics and Sneakers

Riskified Holiday Study Reveals eCommerce Fraud Still on The Rise – Sneakers and Cosmetics Top Categories

Riskified’s latest global data (2021 Holiday Season Report) presents insights into what holiday shoppers are purchasing this year, how to navigate shifting omnichannel preferences, and how online merchants can acquire and retain new customers during a time of diminishing loyalty.

Check Out These Resources

The US eCommerce industry is expected to break new records this year, with Adobe predicting sales will surpass $207 billion between November 1 and December 31.

The rapid growth in eCommerce that started last year because of the Covid-19 pandemic also has a downside as incidents of online shopping fraud more than doubled in 2020. And according to the latest report to Congress by the Federal Trade Commission (FTC), fraud numbers remained far higher than pre-pandemic levels throughout the first half of 2021.

“Mitigating fraud is critical for delivering a superior online shopping experience. With eCommerce sales expected to break records this holiday season, retailers should be prepared for the surge in fraud attempts that will accompany it,said Peter Elmgren, CRO at Riskified.

“Powered by rich transaction data networked across hundreds of merchants, including some of the largest eCommerce retailers in the world, our machine learning platform adapts in real-time to evolving fraud patterns.

“This enables us to help merchants remove risk from the online shopping experience more quickly and effectively than they could do on their own – leading to higher sales and improved customer lifetime value.”

The 2021 Holiday Season Report analyzed changes in fraud levels for different categories as observed by Riskified during the 2020 holiday season, benchmarked against January of that year.

Fraud attempts in cosmetics increased by 47%, topping the list in fraud attempts. The sneakers category saw an 8% increase in fraud attempts, and digital services and children’s items rounded out the list, with a 12% and 15% increase in fraud attempts from 2020, respectively.

Additionally, the report found that during the holidays, desktop orders are 17% more likely to be fraud attempts than mobile orders, and 70% of mobile orders are abandoned at checkout because of the friction added by third-party payment processing sites.

Fraud continues to play a critical role in the acquisition and retention of customers. 76% of consumers say they would not shop online with a retailer again if they had been the victim of an account takeover.

During the 2020 holiday season, the number of fraud attempts from new customers was almost three times higher than in January of that year. However, because of the volume of holiday shoppers switching to online commerce, the share of fraud attempts coming from this new segment increased by only 32%.

Riskified Study Shows Fraud Varies Among Payment Options

With consumers now preferring a variety of payment options, merchants must support these diverse payment methods while navigating potential fraud risks across a spectrum of choices, including Buy Now, Pay Later (BNPL), credit cards, gift cards, eWallets and Buy Online Pickup In-Store (BOPIS).

Key payment-related report insights include:

  • Buy Now, Pay Later (BNPL) solutions are becoming increasingly popular with American Gen-Zers, 37% of which have used a BNPL solution.
  • Direct payments such as ACH and wire transfers showed a marked decrease in risk levels, as did BNPL.
  • The risk level of credit cards remained fairly stable.
  • The growing popularity of gift cards has resulted in a very volatile risk level for fraudulent transactions.
  • eWallets have become steadily riskier, as their risk level has grown by almost 50% since January of this year.
  • During the 2020 holiday season, BOPIS was also a fraudster’s favorite. Compared to January of that year, by December, there were over four times more fraud attempts via BOPIS orders. Compared to all other fulfillment methods, BOPIS was 50-70% riskier than average during Q4 2020.

With the goal of helping merchants prepare for this year’s highly anticipated holiday shopping season, Riskified’s report also outlines six key takeaways they should keep in mind. These include:

  1. Building customer confidence by fighting fraud and abuse efficiently.
  2. Providing flexible payment options.
  3. Incentivizing in-store fulfillment without increasing vulnerabilities.
  4. Offering a clear, flexible return policy.
  5. Lowering the barrier for entry for new-to-digital shoppers.
  6. Making first-time shoppers come back with loyalty programs and store accounts.

More details and insights from the full Riskified 2021 Holiday Season Report can be found here.

Riskified is a leading eCommerce risk management platform using advanced technology to help merchants build and maintain customer relationships.

Subscribe to Our Newsletter

We do not sell your information.
You can unsubscribe at any time.


Head over to our Facebook Group for Small Business Marketplace Sellers and interact with us and other small business owners. Follow us on FacebookTwitter, or LinkedIn to stay up to date with relevant news and business insights for your online business.

Leave a Reply

Your email address will not be published. Required fields are marked *