Fashion retailers have seen a stark rise in nearly all types of fraud thanks to the rise in ecommerce shopping during the pandemic.
Fraud detection specialist Ravelin found that over half (54 per cent) of all fashion retailers have seen a rise in refund abuse since the start of the pandemic.
According to the report, retailers are “scrambling to drive ecommerce” to capitalise on the pandemic online shopping boom, leaving themselves vulnerable to abuse from both customers and professional fraudsters.
Nearly a third (32 per cent) of fashion retailers said they had experienced a rise in online payment fraud over the past year, while a further 44 per cent saw a rise in account takeovers and promotion abuse.
Despite this, Ravelin says that almost a quarter of fashion retailers have a fraud prevention team of five people or fewer, though three quarters of these say they expect to increase their fraud team size and budgets in the near future.
“The conditions of the pandemic have created a veritable petri dish for the growth of fraud,” Ravelin’s co-founder and chief information officer Mairtin O’Riada said.
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“Retailers are scrambling to drive ecommerce and are handling extremely high volumes of transactions online, while also trying to fulfil a growing number of online deliveries.
“Fraud teams within fashion brands have a job on their hands now to mitigate the threat of fraud to protect profit margins. The only way to do that effectively is through machine learning-based technology.
“However, more fashion retailers use rules-based systems than any other type of retailer to combat fraud. Now’s the time to consider more sophisticated technology.”