The context
In the U.S.A., e-commerce return fraud cost retailers US$103 billion in 2024, after US$101 billion in 2023, according to the NRF and Appriss. In France, across all sectors, document fraud cases jumped by 33% in 2024, according to document fraud prevention company Finovox. In terms of volume, individual fraud dominates, which is not the case in terms of value, with only a few cases involving several million euros. In retail, the sectors most affected are high-value goods like electronics, tablets and headphones, luxury goods, fashion and cosmetics. These are expensive products that sell well second-hand. In terms of dispute management, fraud affects customer relations, but also HR. In terms of markets, “it is more professionalised in the US, and we are also seeing high rates around the Mediterranean basin”, according to Marc de Beaucorps, C.E.O. of Finovox, which generates 10% of turnover internationally and 90% in France. “Overall, fraud is becoming more professional every year and is growing in importance”.
According to all experts interviewed by mind Retail, fraud is proportional to the level of digitalisation of the retailer. We have excluded fraud targeting individuals (fake advisors) from our analysis to focus on fraud affecting businesses. “Since 2020, retailers have gone digital across the board, and we’ve seen the emergence of malicious individuals seeking to take advantage of this novice aspect”, summarises Jonathan Spedale, Fraud Analyst, Investigator and Founder of Cyber Moustache. “Covid-19 accelerated things, with deliveries split between pick-up points, lockers, etc. Today, fraudsters are both small-time profiteers and, increasingly, individuals who have set up dedicated companies and generate revenue ranging from €500 to €2,000 per day”. Sometimes, fraud involves the direct participation of a company employee, who is paid by the fraudster.
“Today, fraudsters are both small-time profiteers and, increasingly, individuals who have set up dedicated companies and generate revenues ranging from €500 to €2,000 per day” – Jonathan Spedale, Founder of Cyber Moustache
Although it has been around for 5 to 6 years, ‘refund’ fraud, which involves buying a product online, claiming not to have received it, obtaining a refund and then reselling the product, is very common. This developed because other information systems have been made more secure. Since 3DSecure, it is no longer possible to commit fraud with just a credit card number. According to Jonathan Spedale, “in e-commerce, we are now seeing a decline in payment fraud, with international organisations moving more towards refunds”. This ‘refund’ fraud increases during peak consumption periods (Black Friday, sales). At Joué Club, Q4 accounts for more than 50% of annual sales and 70% of online revenue. “These are periods of a total rush, when there are mathematically fewer checks”, sums up Marc de Beaucorps.
“In e-commerce, we are now seeing a decline in payment fraud, with international organisations moving more towards refunds“– Jonathan Spedale, Founder of Cyber Moustache
In France, the legal penalties provided range from up to 5 years’ imprisonment to a €375,000 fine, with civil proceedings.
