Guest contribution • 26.07.2021

In the age of online shopping, shoplifting has gone digital

Popularity of online shops on the rise, and with it the number of digital fraud cases

The pandemic has forced shoppers to dramatically alter their behaviour. In no sector is this more obvious than in food shopping.

Frau in grünlichem Oberteil und mit braunen kürzeren Locken lächelt in die...
Emilie Grünzweig, Director of eCommerce & Fraud at Riskfied
Source: Riskified

Grocers have experienced huge demand for online shopping. Many consumers will have switched to online deliveries in the last 12 months due to safety concerns relating to Covid-19.  According to a survey by Mastercard, just under one in four Germans ordered groceries online for the first time during the lockdown. And many will have found it more convenient and are likely to stick with it even once the pandemic is over.

However, alongside this rise in popularity, there has been an increase in online fraud. According to a recent survey by the German Federal Office for Information Security (BSI), almost one in eight Germans has been a victim of fraudsters in online commerce. Methods we witnessed vary from carding, where fraudsters place low amount orders in supermarket websites to test out the validity of credit card details, to more sophisticated fraud schemes targeting customer accounts directly. The latter method is especially attractive to criminals because of customer benefit schemes such as loyalty points, which can be easily spent on purchasing products, and are less likely to raise fraud concerns compared to card payments.

The methods of the fraudsters

There are two main ways that fraudsters gain access to these login details in the first place. There is “credential stuffing” where fraudsters use bots to mass test login details leaked in data breaches. They’ll test the login details across multiple sites. Another way that fraudsters access these details are “phishing scams”, in which fraudsters target individuals and trick them into sharing confidential details, such as account login data or card payment numbers. According to Statista, online shops made up the largest percentage of phishing attacks in the third quarter of 2020, at around 19.22%.

Digital transformation has given rise to potential avenues for fraud in the grocery sector: contactless shipping and delivery, as well as the option to buy online and pick up at curbside or in-store (BOPIS). This has turned out to be convenient not only for consumers, but to fraudsters as well. BOPIS, in it’s “COVID version” means that a proper physical identification of the consumer is almost impossible to do and needs to be done online, prior to the pick up of the goods. Also, many of these orders have short fulfillment windows and must be approved almost immediately. To keep the customer experience as smooth as possible while keeping the much needed social distancing rules in place, physical identification during pickup is rarely requested and  it usually refers to an order number or an online receipt.  But, if the fraudster has taken over the account of a legitimate customer, or used his own email while paying with someone else’s credit card for the transaction, they can easily access both and fool the merchant.

Food online retail is on the rise. Read more here:

Over the shoulder: man holding smartphone with app open for online ordering....
Source: AnnaStills

What retailers need to do now

Combating fraud is difficult due to the risk of being overcautious. For instance, supermarkets can cancel orders if they believe they are fraudulent. But cancelling legitimate orders will frustrate customers, who can easily take their business elsewhere, as another store is only a webpage away, rather than the other side of town. So, what should merchants do? First, know what goods are being targeted. Currently, pharmaceuticals and liquor are common targets, as they are non-perishable and easier to resell. However, these trends change over time. Second, it is crucial to try and identify customers by connecting digital accounts to their physical owners. Merchants should understand the MOs fraudsters use and adopt fraud prevention strategies that also address the growing problem of ATOs, especially since there is no time to manually check every order for fraud.  

As shopping has gone online, so too has shoplifting. Fraud prevention technologies that rely on machine learning models for real-time decisions are an excellent match for the grocery industry. Using the power of strong customer networks and data linking can help merchants prevent fraud and adapt to changing order patterns even when sales skyrocket.  Today’s supermarkets need to adapt and defend against these modern-day threats. This is the only way they can offer their customers seamless service in the long term and increase their sales at the same time.  

Author: Emilie Grünzweig, Riskified

related articles:

popular articles:

Thumbnail-Photo: RH-ISAC announces new eCommerce campaign for retail sector...
22.04.2021   #online trading #e-commerce

RH-ISAC announces new eCommerce campaign for retail sector

Partnership with eCommerce security organizations to increase digital security

The Retail & Hospitality ISAC announced a sector-wide eCommerce campaign in partnership with leading eCommerce security organizations to increase digital efficiency, security, and compliance within the retail, hospitality, and travel sector.The ...

Thumbnail-Photo: HEMA Buttons Up Omni-channel Supply Chain Transformation with Blue Yonder...
07.06.2021   #brick and mortar retail #digitization

HEMA Buttons Up Omni-channel Supply Chain Transformation with Blue Yonder

Department store retailer increases forecast accuracy leading to improved planner productivity and better fulfilment with AI/ML-powered Luminate Planning

Ensuring the right inventory is available to meet customer demands became even more important during the COVID-19 pandemic. Thanks to its recent digital transformation with Blue Yonder’s cloud-based ...

Thumbnail-Photo: Assortment planning: Knowing what customers want...
17.05.2021   #customer analysis #artificial intelligence

Assortment planning: Knowing what customers want

Bonprix relies on AI-supported assortment design

Which skirt is currently particularly popular? Should the dress remain on sale? How did the sweater sell last month? Product managers in the fashion industry ask themselves these and many other questions every day. At bonprix, the ...

Thumbnail-Photo: Digital workers in retail: More time for important things...
19.04.2021   #personnel management #software applications

Digital workers in retail: More time for important things

Relieving employees with intelligent automation

Retail customers today demand superior quality and a world-class service experience in real time. Companies must strike a balance between the need for qualified personnel and high customer demands if they do not want to jeopardize the satisfaction ...

Thumbnail-Photo: Arvato Supply Chain Solutions in Poland starts cooperation with Sephora...
11.06.2021   #brick and mortar retail #digitization

Arvato Supply Chain Solutions in Poland starts cooperation with Sephora

Plewiska/Poland - Arvato Supply Chain Solutions is expanding its cooperation with the cosmetics company Sephora. In April 2021, the company therefore commissioned a new distribution center to support its e-commerce and B2B business in Pruszków, Poland.

The new warehouse covers an area of 7,000 square meters, making it almost 2,000 square meters larger than the previous one. One of the innovative solutions used here for Sephora is self-driving vehicles called Weasels®, which automate transport ...

Thumbnail-Photo: 4 applications of AR and VR that can transform your retail sales...
19.07.2021   #sales promotion #product presentation

4 applications of AR and VR that can transform your retail sales

Enhanced reality applications for sales promotions and product marketing

Changes in your marketing strategy or adaptation of new technologies can serve as a boost to your sales. Customers value innovative or immersive product presentations. Augmented reality (AR) and virtual reality (VR) are the ...

Thumbnail-Photo: German retail specialist AWEK microdata GmbH joins Zucchetti Group...
07.06.2021   #epos systems #epos software

German retail specialist AWEK microdata GmbH joins Zucchetti Group

Boosting the Group’s leading position in the DACH region

For over 30 years, AWEK microdata GmbH has been one of the leading German providers of checkout software and comprehensive services for medium-sized retailers.AWEK designs euroSUITE, a professional software solution for medium-sized businesses for ...

Thumbnail-Photo: ComputerSalg: Impressive growth, new premises and more technology...
30.04.2021   #electronic shelf labels (ESL) #price labelling

ComputerSalg: Impressive growth, new premises and more technology

To keep up with the growth and the rapidly increasing inventory, the company moved to a new domicile in 2020

The growth comet ComputerSalg, which started as a physical store in 1996, where you could buy computers, hardware and software, has today grown to be one of Denmark's largest webshops. The corona crisis has accelerated the business further at ...

Thumbnail-Photo: The Citizen CT-S4500:  Cost-Effective 4-Inch POS Printing with Perfect...
31.05.2021   #printers #label printers

The Citizen CT-S4500: Cost-Effective 4-Inch POS Printing with Perfect Document Scaling

Compact, functional & stylish design with market-leading print speed

Say goodbye to inefficient laser printing as global specialist printer manufacturer, Citizen Systems, announces the all-new CT-S4500 POS thermal printer. A new and improved POS printer that’s been designed to serve across multiple ...

Thumbnail-Photo: The smart store revolution is heating up!
31.05.2021   #self-checkout systems #self service

The smart store revolution is heating up!

What makes unmanned 24/7 store concepts so appealing?

Whether unmanned stores, vending machines or hybrid solutions – automated smart stores have evolved from mere sounding balloons into genuine shopping alternatives. Even in Germany, where new technologies are initially viewed critically by ...

Supplier

Citizen Systems Europe GmbH
Citizen Systems Europe GmbH
Otto-Hirsch-Brücken 17
70329 Stuttgart
iXtenso - retail trends
iXtenso - retail trends
Celsiusstraße 43
53125 Bonn
TCPOS GMBH
TCPOS GMBH
Saarwiesenstr. 5
66333 Völklingen
Elo Touch Solutions (Belgium) NV
Elo Touch Solutions (Belgium) NV
Wingepark 5B / 301
3011 Rotselaar
SALTO Systems GmbH
SALTO Systems GmbH
Schwelmer Str. 245
42389 Wuppertal
EuroShop
EuroShop
Stockumer Kirchstraße 61
40474 Düsseldorf
Delfi Technologies GmbH
Delfi Technologies GmbH
Landgraben 75
24232 Schönkirchen
Reflexis Systems GmbH
Reflexis Systems GmbH
Kokkolastr. 5-7
40882 Ratingen