A recent online survey released by LexisNexis Risk Solutions examined how fraud affects retail merchants, financial institutions and U.S. consumers, and identified the losses incurred in a fraudulent retail transaction.
The study marked the third annual LexisNexis True Cost of Fraud Study, conducted by Javelin Strategy & Research. A merchant panel comprised of more than 1,000 decision-makers provided responses for the survey.
Overall, merchants and financial institutions reported a decline in fraud rates over the past year, with a concurrent rise in total retail sales. Furthermore, consumers saw a decline in fraud losses, yet there was a $244 increase in out-of-pocket costs, indicating a possible an upswing in fraud going forward, as the nature of crimes are becoming more severe.
“We think we’re in a bit of a lull, the calm before the storm,” said James Van Dyke, president and founder of Javelin, as quoted by Digital Transactions.
Jim Rice, director of market planning for retail and ecommerce markets at LexisNexis Risk Solutions, explained that the most lucrative areas of growth for retail merchants over the past year were international, mobile and ecommerce. However, he notes that these sectors are also the most susceptible to fraud, and merchant fraud prevention techniques must be employed to prevent incidents.