E-commerce giant Amazon itself struggles in preventing counterfeit goods from infiltrating its marketplace. Preventing digital fraud is one of the biggest challenges that online retailers face today. Digital fraud can be in varied forms like counterfeiting, identity theft, and phishing attacks
Fremont, CA: The advent of online retail has led to the opening up of multiple options for consumers. The wide range of products and distributing beyond geographic boundaries has made online retail an agent of glocalization. Consumers can simply sit at their homes and order a product from the other side of the globe. However, online retail is not free from disadvantages, and one of the most persistent problems it faces is counterfeit goods.
E-commerce giant Amazon itself struggles in preventing counterfeit goods from infiltrating its marketplace. Preventing digital fraud is one of the biggest challenges that online retailers face today. Digital fraud can be in varied forms like counterfeiting, identity theft, and phishing attacks. Since 2017, overall retail fraud cases have tripled in number. For medium to large size retailers sending digital goods, the average monthly fraud has increased by 133 percent.
Over the last two years, consumers have lost over USD 450 million to fraudsters, out of which USD 71 million was lost in online shopping scams. Studies have shown that millennial consumers are more vulnerable to fraud than others. Latest digital fraud tracking technologies are making use of Artificial Intelligence and machine learning to help retailers defend their customers better.
In 2018, criminals worldwide made USD 4.2 trillion from the world economy. International e-commerce also has its drawbacks. Transacting online with markets in emerging and developing nations can be troublesome. In such cases, card and digital payments might just be emerging in the countries, making the consumers and retailers a new target for fraudsters. These markets are often filled with loopholes that fraudsters take advantage of. According to reports, the global online retail market is set to reach USD 3 trillion this year, increasing vulnerability to fraudsters.
The increase in online sales also has a majority of consumers who shop for foreign goods. North America's top 1000 online retailers have sold over USD 143 billion worth of goods to customers outside of the U.S. Similarly, more than half of online consumers have ordered products from outside their country. According to reports, 63 percent of online retailers believe that online selling across borders is a critical source of income for e-commerce growth in the future. Most online retailers agree that fraud prevention and currency and payment processing are two of the most significant challenges present in front of the e-commerce industry today. When the product is international, cases of counterfeit become even more severe, as global products are expected to maintain a higher standard in the eyes of the consumer.
In order to prevent online fraud, retailers must provide with a trustworthy platform for their consumers to feel safe. Also, a combination of machine learning and human analysts must be placed to improve anti-fraud responses. Keeping a check on the in-app language and flagging suspicious behavior can encourage smarter and safer decisions among users. Ensure that conflict resolving between retailers and consumers takes place on the web-based platform. Conversations that are taken outside the platform via email or telephone can be cases of counterfeit goods.