eBay Enterprise Unveils Holiday Fraud Index and Key Findings that Leave Retailers Vulnerable

Company’s Fraud Technology Lab Debunks Five Myths to Help Boost
Holiday Sales

KING OF PRUSSIA, Pa.–(BUSINESS WIRE)–eBay Enterprise, one of the world’s leading independent omnichannel
commerce providers, today announced its Holiday
Fraud Index
and five fraud myths identified by the company’s Fraud
Technology Lab. Fraud experts at eBay Enterprise debunked these myths to
help retailers and brands boost holiday sales and delight customers
during the busiest time of the year. Findings show criminals are
becoming more creative where, when and how they take advantage of the
season, as the number of fraudulent purchases increases proportionately
when sales peak during the holidays.

Data from orders processed by eBay Enterprise shows that fraudsters go
to great lengths to blend their activity in with legitimate orders.
Criminals choose to fraudulently purchase digital gift cards at the same
time consumers typically return unwanted gifts in exchange for store
credit. Many criminals also prefer to keep a standard Monday through
Friday schedule, given that lab researchers see a spike in fraudulent
attacks on Wednesdays at 8 a.m., just in time for deliveries to arrive
before the weekend.

eBay Enterprise’s Fraud Technology Lab found that the highest fraud
attack rates per state span the entire U.S. It also identified pockets
of freight forwarding in coastal areas where merchandise can be more
easily shuttled to international customers. While many authorized
purchases pass through freight forwarders, certain product categories
such as jewelry and electronics experience higher rates of freight
forwarding fraud and may warrant greater scrutiny.

“There is no question that managing online fraud is a top imperative
facing retailers today,” said Tobias Hartmann, president of eBay
Enterprise. “Ensuring the right mix of automated and manual review is
essential, but can be difficult for businesses to navigate on their own,
as we’ve seen criminals try to find weak spots in fraud prevention by
bombarding retailers with attacks. Many fraud management strategies
employed by retailers can cause more harm than good, stressing just how
important it is to partner with a trusted resource.”

The Holiday Fraud Index exposes five myths that can end up hurting a
businesses’ bottom line:

  • Myth #1: Digital gift cards are too risky to sell.
    digital gift cards can be intimidating for retailers because they are
    the equivalent of cash and are delivered quickly, they do not need to
    be viewed as too risky to sell. Digital gift cards are an extremely
    popular choice among good customers and the volume of good orders
    outweighs the fraudulent attempts.
  • Myth #2: High distance, high dollar, high expedite equals high
    fraud risk.

    Greater distances, more expensive dollar values
    and quicker shipping options do not guarantee fraud, just as short
    distances, inexpensive dollar values and slower shipping do not ensure
    legitimate orders. It is dangerous to rely on only one of these
    metrics when crafting a fraud prevention strategy. Additional
    attributes should be layered on to help retailers find truly
    fraudulent transactions.
  • Myth #3: Machine learning can replace manual review.
    it is important for ecommerce to improve technologically to combat
    unauthorized activity, it is just as important to understand the value
    of manual review. There are nuances in some good orders that even the
    most sophisticated computer programs mistakenly label as fraud.
  • Myth #4: International orders are more risky than domestic ones.
    orders are tricky for retailers, but more than 97 percent of orders
    shipping internationally for eBay Enterprise clients have been
  • Myth #5: Freight forwarders are inherently bad.
    forwarders – also known as mail forwarding companies – have a negative
    reputation in some ecommerce circles, but hundreds of thousands of
    good transactions flow through freight forwarders every year.

“The holiday season brings twice the stakes for fraud, as retailers see
a spike in order volumes, alongside an increase in fraudulent attacks,”
said Michael Graff, risk manager at eBay Enterprise. “Businesses must be
mindful to not give into strategies that are overly cautious and end up
killing good orders, but instead craft a fraud management plan that
balances automated intelligence with the benefits of human supervision.”

For more information, download electronic copies of the Holiday
Fraud Myths eBook
and the Fraud
Index Infographic

About eBay Enterprise

eBay Enterprise is a global omnichannel commerce provider that delivers
order management, store fulfillment, dropship, payments, and fraud
protection and risk management solutions, and fulfillment, freight and
customer care services. Hundreds of retailers and brands rely on eBay
Enterprise to simplify commerce, connect supply to demand, and
seamlessly integrate technologies, with speed and agility to increase
profitability and customer loyalty. eBay Enterprise’s integration with
Innotrac Corporation has created one of the world’s leading independent
omnichannel commerce providers. Connect with eBay Enterprise at www.ebayenterprise.com.


Finn Partners for eBay Enterprise
Amy Christie, (312) 329-3903