While some of us are preparing to host the family dinner for Thanksgiving, many of us are getting our credit cards ready for Black Friday and Cyber Monday. Over the past few years, we have seen more consumers shy away from getting up at 3 a.m. or camping out in tents, when the same or better deals are available online. Since we now live in a smartphone and tablet world, retailers have taken to the internet to offer their best deals.
This should come as no surprise since last year’s Cyber Monday sales hit $2.29 billion, according to the Adobe Digital Index. That was a 26% increase from the previous year, and industry professionals project similar increases this year. The two most popular hour blocks for online shopping on Cyber Monday were between 11:00 a.m. and 12:00 p.m. ($135 million) and 8:00 p.m. to 9:00 p.m. ($150 million). With the high buying traffic from consumers comes the increased activity from fraudsters, because this is their holiday shopping (stealing) season as well.
Why Do Fraudsters Thrive?
The fraudsters like to hide in the crowd. When stores are full of consumers it is far easier to steal. The security personnel and monitoring systems are taxed as wall-to-wall buyers can camouflage the crooks within the masses. The confusion, long check-out lines, returns, exchanges and the sheer volume of activity is their fertile ground.
The same for online: the sales volume, gifting (sending to multiple addresses), returns, exchanges and the like, stress the best merchant order management and fraud mitigation systems. There are too many orders that should be referred for follow-up calls or other order validation measures. Merchants are faced with the dilemma of loosening up their screening criteria or risk unwanted sales insults or false positives.
That is why Cardinal Consumer Authentication (CCA) works. First, it actually helps improve the conversion or yield of sales orders (more sales). Second it shifts the liability for fraud to the Issuing banks so their systems can quickly and seamlessly validate the consumer. It also shifts some of the merchant’s internal burden of “double or triple checking” valid orders for shipment. Most importantly, we tune authentication so that the consumer has the best experience.
In real-time, CCA compares what the banks know about their Customers and what merchants understand about their consumers. The result is more sales, improved margins (lower fraud and interchange savings) and the best consumer experience.
This conversation shouldn’t be limited to “Cyber Monday,” because one of the market trends now is “Cyber Week.” In reality, it is the holiday shopping season which lasts anywhere from 30 to 45 days. This is where businesses offer Black Friday-like deals for the entire season. This also creates a greater window and opportunity for fraud.
What is the Dollar Implication for My Business?
An important fact to understand is high sales volume is the fraudster’s friend. According to Internet Retailer, most card-not-present fraud happens between noon and 1:00 p.m., at the peak of sales volume. Today, more merchants are using CCA, and that leaves those that are not more vulnerable, according to the CardinalCommerce/The Fraud Practice’s 2014 Annual Consumer Authentication Survey. The Fraud Practice found that fraudulent transactions on a smartphone and tablet on Black Friday last year were $190 and $210, respectively.
What You Can Do to Protect Yourself
Contact us to learn more about Cardinal Consumer Authentication, not only for Cyber Monday, but the other 364 days of the year. At Cardinal, we have professionals who are ready to help.
To learn more about what your savings could be, contact us!