Report: Mobile Merchants Experiencing More Fraud
Sept. 20, 2012
Atlanta-based LexisNexis Risk Solutions said this week the cost of fraud to retailers in 2012 is up 17 percent from last year, according to its 4 th annual True Cost of Fraud Study. In addition to the cost of the stolen product, LexisNexis and its research partner Javelin Strategy & Research account for chargebacks, fees to banks and processors and replacement or restocking fees to calculate the “true” cost of fraud to merchants. The study also found that the cost of fraud for merchants that accept mobile payments rose even more than the overall cost. Mobile merchants paid $2.83 for every $1.00 lost compared to just $2.00 for 2011, an increase of more than 40 percent.
“With the size and pattern of fraud significantly impacted by global economic conditions and the move to mobile payments,” said Jim Rice, director of market planning, Retail and E-Commerce Markets for LexisNexis Risk Solutions, “this turbulent time requires merchants to be more vigilant than ever.”
The study also found that while only 39 percent of merchants believe that lower fraud rates can increase customer loyalty, a third of consumers who fall victim to fraud are less inclined to do business with those merchants.