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Radial Asks Retailers: Are You Prepared to Handle Top Fraud Threats? New Fraud Index Says No

The darker side of eCommerce fraud: savvy cyber criminals, massive data breaches and widespread EMV adoption

KING OF PRUSSIA, Pa. – January 31, 2018Radial, the leader in omnichannel commerce technology and operations, today released its 2017 Fraud Index informing the pervasive and shifting nature of fraud as eCommerce continues to surge. Data scientists from Radial’s Fraud Team analyzed data from hundreds of clients and billions of transactions to create the 2017 Fraud Index that identifies the EMV, digital gift card, cross border and shipping and fulfillment trends putting retailers at risk.

“With billions of data elements and more than 15 years of hands-on fraud management, Radial is in an inimitable position to thwart fraud and increase revenue for retailers,” said KC Fox, VP of payments, tax and fraud at Radial. “As of September 2017, data breaches ─ at least the ones we know about ─ were 375 percent higher than 2016. Combine that with the majority of retailers being EMV compliant, and it’s Christmas every day for cyber criminals. Any retailer that is trying to manage this massive and extremely complex problem alone is risking the viability of their business.”

Radial’s 2017 Fraud Index takes an in-depth look at five trends and the data behind them to help retailers decide if managing fraud on their own is a wise decision.

  1. Card-Not-Present fraud continues to rise with some market segments more vulnerable than others, but the blame does not lie solely with EMV. In 2017, fraud attacks in cosmetics soared 400 percent versus 2016. Apparel wasn’t far behind, with more than four times the increase in attacks, followed by a two-times increase in the electronics, home and entertainment segments.
  2. Data breaches are igniting fraud attacks, with 2017 reporting the highest number of breaches since tracking began. One of 2017’s worst data breaches that impacted 145.5 million U.S. consumers, started in mid-May and wasn’t discovered until the end of July. Radial’s data shows a significant uptick in fraud attacks across four market segments during this same time period, and then a corresponding decrease in attacks and a shift to other market segments when the attack was made public in September.
  3. Digital gift cards steadily increase in risk YoY, showing on average a four-times increase in fraud attacks from Thanksgiving to Christmas compared to 2015. Digital gift cards remain a popular target for fraudsters as they take advantage of the surge in order volumes during the holiday season to mask their criminal intent. Overall, the average year-over-year attack rate counts for 2016 and 2017 combined were four-times higher than 2015 and the average dollar volume attack rates nearly doubled.
  4. Shipping and fulfillment methods carry different risk, but all areas saw an increase in attacks in 2017. Fraud attacks were 2.5 times higher for ground shipments for the first three quarters of 2017, compared to 2016. Despite this increase, ground shipments carry the least financial risk when it comes to fraud—for every $211 of good orders shipped via ground there is $1 of fraud attacks. In contrast, same day (e.g., digital gift cards) poses the highest financial risk—with every $10 of good orders comes $1 in fraud attacks. Overnight shipping remains a favorite with fraudsters and the riskiest physical shipping method for retailers as evidenced by $1 of fraud attacks for every $13.
  5. Credit card BIN Country and IP Country are red flags for fraud, with certain geographies representing higher risk internationally across market segments. Cross-border selling can be lucrative, but understanding the risks – including geographic trends and susceptible verticals – is essential to success. For the countries with the highest attack rates by BIN and IP for all eCommerce volume within each country, nearly 20 percent of eCommerce fraud in Italy’s entertainment market segment was attributed to credit cards issued from that country’s BIN, while nearly 30 percent in Dominica originated from an IP address in that country. Even more startling is the amount of eCommerce fraud for cosmetics in Venezuela – nearly 75 percent originates from a Venezuelan IP address.

“The Fraud Index clearly demonstrates the complexity of managing fraud in today’s eCommerce landscape,” stated Fox. “In 2017, Radial’s combination of fully outsourced fraud management technology ─ Payments, Tax & Fraud and Fraud Zero, honed processes and fraud experts prevented $80 million in fraud attempts for our retail clients. We have 24x7x365 resources that work in concert and adjust in real time to ensure cyber criminals don’t get the upper hand. Most retailers don’t have the budget or resources, let alone the expertise to stay ahead of today’s cyber fraud, which should make partnering with a third-party expert a priority in 2018.” 

To learn more about the growth of eCommerce fraud and the top risks for retailers, read the full Radial 2017 Fraud Index here.

About Radial
Radial is the leader in omnichannel commerce technology and operations, enabling brands and retailers to profitably exceed retail customer expectations. Radial’s technical, powerful omnichannel solutions connect supply and demand through efficient fulfillment and transportation options, intelligent fraud detection, payments, and tax systems, and personalized customer care services. Hundreds of retailers and brands confidently partner with Radial to simplify their post-click commerce and improve their customer experiences. Radial brings flexibility and scalability to their supply chains and optimizes how, when and where orders go from desire to delivery. Learn how we work with you at


Media Contact
Laura Beauregard
PAN Communications for Radial