October 26, 2017
The average household in the U.S. will spend more than $1,200 this holiday season and, for the first time, more of that money will be spent online than in physical stores, according to a new report from Deloitte. In its 32nd Annual Holiday Survey, the global consultancy found shoppers have earmarked 51 percent of their holiday budgets for online spending versus 42 percent for use in stores, compared to last year when shoppers expected to spend 47 percent of their budgets through each of those channels. Every year prior to that, shoppers planned to spend more in stores than online.
While an increase in transactions generally means an increase in fraud for merchants that accept card-not-present payments, fraud patterns around the holidays don’t necessarily adhere to that maxim, according to Emilie Grunzweig, senior fraud analyst at antifraud technology provider Riskified. Overall, there is more fraud during the holiday season (and, given Deloitte’s numbers, probably more this year than last), but the fraud rate is actually lower and merchants can count on some days being safer than others.
“While retailers can expect roughly double the normal daily volume of purchases from Thanksgiving to New Year’s Day (with some days peaking at five times as much volume), fraud doesn’t follow suit,” Grunzweig told CardNotPresent.com. “There isn’t an influx of ‘holiday fraudsters’ the way there is holiday shoppers, so the amount of fraud increases relatively little. The increase in fraud attempts is dwarfed by the huge increase in legitimate purchases, meaning merchants can safely approve at rates even higher than they do during the rest of the year.”
Grunzweig said an analysis of Riskified’s merchant base in previous holiday seasons has shown that Cyber Monday is the safest shopping day of the entire year relative to the number of legitimate transactions that occur. During the holidays, however, merchants should beware of Christmas Eve. December 24 is traditionally the riskiest day of the holiday shopping season for e-commerce merchants.