A new Transactis-Retail Knowledge survey of
leading loss prevention professionals shows that 88 per cent see retailers
placing a greater focus on fraudulent goods lost in transit (GLIT) claims than
they were two years ago, and the same proportion view returns fraud as a
similar or greater risk. The research also indicates that lost deliveries and
returns fraud is no isolated problem: 81 per cent of the experts surveyed see a
correlation between GLIT and other types of loss, while 94 per cent see a link
between any opportunist fraud and other types of fraudulent activity.
The survey,
carried out by consumer insight and data analysis firm Transactis at a recent
Retail Fraud Conference shows that the vast majority of loss prevention
professionals also support the idea that sharing data is critical to thwarting
this type of first-party fraud: more than 90 per cent believe data from other
retailers about losses due to opportunist fraud would be valuable to those
seeking to prevent all types of fraud against their own organisation.
Other
findings indicate that most retailers have a long way to go to put in place the
methods and infrastructure necessary to do so, as only:
- 13 per cent of loss prevention experts believe
retailers can distinguish between legitimate and false GLIT claims without
alienating genuine customers - 19 per cent believe retailers have in place a
defined process to record and track all GLIT claims - 44 per cent see retailers utilising claims
histories in their anti-fraud processes - 31 per cent believe retailers are aware of the
gross margin loss caused by GLIT claims
This new research
builds on the findings of a survey of more than 1,000 UK consumers commissioned
by Transactis last October indicating that, in the era of ecommerce and Big
Data, most people have quite a clear idea of how and when retailers use their
personal information – understanding that it can be used to benefit them. The study
also revealed, however, that consumers take note when data is used
irresponsibly, sloppily or not at all – seeing this as an indicator of poor competency.
The study
showed that many, in fact, see failure to use data properly to track their actions
or behaviour as an invitation to take advantage. Where there is opportunity to
“get away with it”, these consumers will go for it: roughly half will keep an extra item if a retailer mistakenly
delivers two instead of one, and close to two-thirds will keep a loyalty reward
bonus they hadn’t earned or a mobile upgrade they were not entitled to. In fact, a significant proportion will
even take their chances when there could be dire legal consequences – nearly a fifth would not return a wrongly
awarded state benefit, while a quarter would retain a mistaken tax credit.
Dave Webber, product and professional services director for Transactis,
notes: “The challenge today is in identifying opportunistic fraudsters and
taking action to stop them when individual companies may only sell to most of
these ‘customers’ once or twice a year – so they have little opportunity to see
a pattern that, when analysed, would indicate potential fraud risk.
“The ideal scenario is to bring together all available loss
data on multiple types of interaction from an array of companies, so that suspicious
patterns of behaviour could be identified. The retailers can then recognise
common MOs and unusual trends based a broader view of trading history. And it’s
not just the individual in various guises who needs to be identified – the
address is vital and provides critical information that should be factored in
too.
“The more data from different sources, the wider the scope
for true behavioural profiles. It not only helps to identify fraud risk early
in the process – when simple and cost-effective actions such as added security
questions and signed acknowledgment can be taken – but it steers retailers away
from putting unnecessary barriers up for good customers with genuine issues.”
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