Retailers brace for fraud spike during peak shopping season

Half of UK retailers anticipate a spike in fraud attacks on their businesses in the Q4 shopping period, according to research commissioned by Adyen.

The research is part of a report on the state of the UK retail sector, titled The Expectation Gap, which is available to download here.

It was conducted by Censuswide and Opinium, who polled 358 retailer decision makers and 2,000 consumers respectively.

37% of retailers reported an increase in fraud attempts on their business during the pandemic, while 26% admitted that they fell victims to fraud or a data leak over this period.

This year, when retailers have been tackling supply chain disruption, staff shortages, and the lingering effects of the pandemic, 53% describe peak as ‘make or break’ for their businesses.

Despite challenges, they are optimistic about the peak season and the possibility of shoppers returning to stores. 56% said that physical stores would play a more important role in this period.

Customers appear to agree; 32% will avoid shopping in physical locations following the pandemic.

However, retailers must focus on delivering stand out experiences while protecting against fraud, or customers will vote with their feet. 65% will not shop with a retailer again if they have a bad experience, either in-store or online.

Consumers also have high expectations for the hospitality sector when it comes to fraud protection, with 57% believing that restaurants, bars, and cafes need to do more to protect them.

“The peak shopping period is so important to retailers every year, but it has taken on even more significance in the context of the pandemic,” says Colin Neil, UK Managing Director at Adyen.

“After the disruptions of last year’s regionalised lockdowns running into Christmas, retailers can take heart that consumers are looking forward to returning to stores again.”

He adds: “But whether in store or online, a laser focus on fraud defence will be critical, especially since fraudsters are most active during these busy periods”

“Luckily, today, the same technology that ensures customers enjoy the smoothest possible payment experience, also acts to protect them.”

“AI and machine learning helps customers authenticate themselves quickly and easily, keeping payments frictionless while safe-guarding their data and your business.”