Fraud costs increased 7.3% for U.S. retailers year over year
LexisNexis® Risk Solutions has released its 11th annual LexisNexis Risk Solutions 2020True Cost of Fraud™ Study: e-Commerce/Retail Edition. The study that surveyed risk and fraud executives at e-commerce and retail companies in the U.S. and Canada reveals that fraud continues to increase and most acutely affects mid to large-sized e-commerce and retailers. Retailers experienced increased online and e-commerce fraud volumes and monetary losses correlating to a mass shift to online and mobile transactions during the COVID-19 pandemic.
The result of increased fraud volumes translates into a 7.3 percent increase in the cost of fraud year-over-year for U.S. e-commerce and retail merchants. The LexisNexis Fraud Multiplier℠ – the total amount of costs related to fees, interest, merchandise replacement and redistribution per dollar of fraud for which the merchant is held liable – shows fraud now costs companies $3.36 for every dollar lost to fraud compared to $3.13 in 2019 and $2.40 in 2016. This is an increase of $0.96 over five years. U.S. costs are significantly higher than the cost that Canadian retailers face per $1 lost to fraud at $2.87.