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E-Commerce Driving Retail Fraud Loss

Loss prevention is top of mind year-round for most retailers, but businesses may be more susceptible to retail fraud now than ever before.

The National Retail Federation (NRF) reported findings from the 2015 True Cost of Fraud Study from LexisNexis, which found that the percentage of revenue lost to fraud nearly doubled from 2014 to 2015. The increase can be attributed to an increase in online and mobile fraud, according to the study. The annual study is based on LexisNexis’ “Fraud Multiplier,” which determines the total cost per dollar of fraud.

Retail fraud connected with online, telephone and mail orders contributed to an overall growth in the cost of fraud to retailers. The study shows that retailers lost approximately 1.32 percent of revenue to fraud in 2015, up from 0.68 in 2014.

Online activity generated 55 percent of the fraud experienced by retailers in 2015, up from 42 percent in 2014.

Over the next several years this problem is expected to worsen. Fraud happening where a credit card is used but doesn’t have to be shown to make a purchase, such as on e-commerce sites, is expected to nearly double from $10 billion to $19 billion, according to the study.


About Hilary Welter

Hilary Welter
As marketing and research coordinator, it’s Hilary’s duty to keep retailers informed about NRHA products and services and to help coordinate industry research projects. Additionally, Hilary is the voice behind NRHA’s and Hardware Retailing’s social media accounts. She appreciates a good book, spicy food, well-made horror films, craft beer and exploring new places near and far.

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