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Jewelry Sector a ‘Favorite for Fraudsters’ Online
Jun 26, 2017 10:04 AM
By Rapaport News
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RAPAPORT... E-commerce fraud increased 13% in the jewelry industry
over the past year, according to a recent report by fraud-protection company
Signifyd.
Fraudulent payments accounted for 13.3% of online jewelry
transactions during the first quarter of 2017 in terms of dollar sales, the
company said in its Global Fraud Index for May. This compared with 11.8% during
the same period in 2016, making the jewelry and precious-metals industry one of
the few sectors in which the rate of scams increased over the past year. In
contrast, total e-commerce fraud fell 35% in the first quarter, accounting for
3.6% of online transactions.
The jewelry and precious-metals sector is a “favorite for
fraudsters,” Signifyd said. The average chargeback in the industry — the amount
a retailer pays to cover a customer’s loss from a fraudulent transaction —
stood at $1,970 for orders above $500, the highest of any sector.
While jewelers tend to rely heavily on blacklisting as a
way of keeping scammers at bay, criminals simply find ways to dodge these
restrictions, according to the report. In fact, since the rate of fraudsters taking
over customers’ accounts is 10 times higher in jewelry than the average, blacklisting
often leads to the rejection of legitimate customers once they regain control
of their hacked accounts, Signifyd pointed out.
In addition, because there is strong competition in the
industry for high-value clients, merchants are reluctant to share information about
their customers and transactions, which hampers their ability to use advanced
fraud-protection tools, the company explained.
Another reason fraud is rampant in the sector is the resale value of these commodities, the report said.
“Jewelry and precious metals are still seen as viable
alternatives to currencies and financial investments in turbulent markets,
which means demand remains high,” it explained. “Fraudsters are easily able to
resell stolen goods and are assured of a global marketplace for such goods.”
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Tags:
ecommerce, fraud, Global Fraud Index, Jewelry, Online fraud, Rapaport News, Signifyd, US
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