If anyone knows the power of preparation ahead of a busy sales season, it’s Grant Arnott, the cyber-sale pioneer behind Click Frenzy. Ekata’s James Sibbick sat down with Arnott at the iMedia Online Retail Summit. Together, they asked the room: is your fraud team ready?
Fraudsters paradise
During the peak holiday shopping season in 2021, Scamwatch received over 26,000 reports of online shopping scams – more than the total reported through all of 2020. Arnott calls these sales a “fraudsters paradise.”
The checkout process is another bot-attacking beast altogether. In fact, despite a global growth rate of 41% of bot attacks in 2021, APAC experienced an attack surge of 86%. This included platforms indiscriminately being targeted by fraudsters hacking into trusted user accounts to access card-on-file and make large purchases.
Strategic friction: Striking a balance
As Arnott explains, when you are offering an amazing deal, checkout needs to be an onerous process.
“The goal is to offer a fast and easy checkout but with such sophisticated bots, the process needs to be manual. If you are going to get an iPad for $3 you have to expect to answer some questions and (wait for) verification.”
Arnott likens this process to a treasure hunt; asking questions of your customer and then manually verifying the answers. He acknowledges that abandonment does happen. In 2024, Statista reported a 70.19% online shopping cart abandonment rate globally.
Still, Arnott explains that shoppers do understand that hoops need to be jumped through to get a deal.
“It’s a huge balancing act – managing fraud and a seamless transaction that doesn’t deter the customer from making a purchase.”
Strategic friction comes into play here. This means deciding where and when friction is required in a workflow and determining your approach from there.
Choose the right tools
In our study, it was reported that 70% of companies used three or more tools to help make this incorporating-friction-process smoother. Companies should automate transactions to speed up the process and layer in a validation method. Adding authentication tools for higher-risk transactions will increase friction for fraudsters. And only when necessary, they need to manually verify information at the bottom of the flow.
Remember, no single solution will solve all of your problems. First, decide where your vulnerabilities lie. Is it at the check out? Or sooner, at account opening? The right partner will help analyze your data to steer you in the right direction.
It’s important to seek a way to optimize both your internal and external resources. This hybrid approach of AI and human expertise is especially important during intense holiday sales periods. An easy to use tool that transforms customer information into a clear to read, data-driven analysis – fast – is your ticket to success.
