Radial Unveils Holiday Fraud Index and Key Findings that Leave Retailers Vulnerable | Radial

Radial Unveils Holiday Fraud Index and Key Findings that Leave Retailers Vulnerable

Press Room

November 19, 2015

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

November 19, 2015 – Radial, 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 Radial 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 Radial 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.

Radial’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 jewellery 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 Radial. “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.

  • While 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.

  • Although 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.

  • International orders are tricky for retailers, but more than 97 percent of orders shipping internationally for eBay Enterprise clients have been legitimate.

Myth #5: Freight forwarders are inherently bad.

  • Freight 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 Radial. “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.”


About Radial

Radial is the leader in commerce technology and operations, enabling brands and retailers to profitably exceed retail customer expectations. Radial’s technical, powerful omnichannel solutions connect supply and demand through efficient fulfilment and shipping options, intelligent fraud, payments, and tax systems and personalised customer care services.

Hundreds of retailers and brands confidently partner with Radial to simplify their post-click commerce and improve their customer experiences. Radial brings flexibility and scalability to their supply chains and optimizes how, when and where orders go from desire to delivery.

Learn how we work with you to keep commerce clicking www.radial.com