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Ecommerce fraud among consumers rises as online sales fall across Europe

Faced with high inflation and soaring energy prices, UK consumers are unleashing their darker sides and scamming online retailers in order to get free products, according to data from commerce protection provider Signifyd.

UK consumers surveyed for “The State of Commerce in Europe 2023” showed little compunction about admitting to cheating on returns and claims of poor service while they shopped online.

In fact, 32% admitted to falsely claiming an ecommerce order was not satisfactory when delivered in an attempt to get a refund and keep the product. A quarter (26%) said they had claimed that an ecommerce order that did arrive did not arrive in order to keep the item for free.

Around 4% said they sent back an empty box or a box containing something other than the original product in order to keep an online purchase and receive a refund.

The responses serve as a warning to British merchants as they head into the festive season – the stretch that defines the year for most retailers – that rising prices may be shifting Britons’ moral compasses out of kilter.

The survey also found that 55% of UK consumers are spending less in inflationary times. Now, the question becomes whether they will turn to false claims of fraud and return abuse in order to cut back while keeping up.

“The State of Commerce report makes clear that after several challenging years, neither the economy nor the rising levels of fraud and abuse are getting any easier for retailers,” Ed Whitehead, Signifyd managing director, EMEA, comments. “We’re pleased to have built a report that not only points to the hurdles ahead but also provides actionable strategies to clear those hurdles.”

Ecommerce down everywhere

Signifyd’s report, which provides a deep dive into the state of ecommerce across Europe and in the UK, found challenges ahead based on the industry’s current state and projections of what’s to come. 

Specifically, the report found that online sales in Europe overall were down 16.6% mid-way through 2022, compared to last year. That compares to the first half of 2021, when ecommerce sales rose 10.6% in Europe. Online sales in the UK bucked that trend with sales finishing higher than the year-ago figure during every month of 2022, fuelled by dramatic increases in sales of electronics and business supplies and solid gains in luxury goods.

Cyber Week online sales across Europe will be up 3% this year, but higher spending won’t last. For the overall festive season (November and December), sales across Europe will fall 4% below last year’s lacklustre performance. 

The hoped-for television boost, prompted by football fans craving a top World Cup viewing experience, won’t be coming. Average TV prices are up 48% over two years ago and trending higher.

Apparently, even the harmonic convergence of festive shopping and a festive-season World Cup will fail to ignite spending in November and December, according to Signifyd’s analysis. One key reason, according to the State of Commerce report: Inflation has pushed the price of a new television, which was once a World Cup must-have, out of reach for many.

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