The Simility Blog
This Holiday Season Make Buy Online Pick Up In Store Work to Your Benefit
Vanita PandeyNovember 28, 2018
Gain competitive advantage and spread cheer among customers with a secure BOPIS experience
Holidays provide retailers with a perfect opportunity to offer personalized online shopping experiences and drive impulse purchases when customers visit their stores to pick up the items. So, we can expect retailers to go all out and try technology-enabled innovative ways this holiday season to enhance the online shopping experience for customers and attract more footfalls into their brick-and-mortar stores. The ‘buy online, pick up in store’ (BOPIS), or ‘Click and Collect’ where customers can make purchases online and visit the store to collect their items is one method that retailers turn to during the holiday season. Although, retailers offer BOPIS throughout the year, it gains greater importance during this period, as the volume of transactions multiplies.
Benefits Retailers and Customers, Alike
BOPIS is not only adding to the online revenues of the retailers but also bringing them growth and profitability through additional in-store sales. More and more retailers are joining the BOPIS bandwagon as corroborated by the Reinventing Retail: 2017 Retail Vision Study, which states that 78% of retailers rate integration of e-commerce and in-store experiences as business-critical.1 The same study highlights how 90% of retailers plan to offer BOPIS by 2021.
BOPIS is equally attractive to customers as they can research online and find the perfect item for purchase from the comfort of their own homes. They can request delivery to a store near them, which saves on delivery charges and the item(s) can be picked up quickly.
Attractive Target for Fraudsters
That said, BOPIS is fast becoming an attractive target for fraudsters. And since it is a card-not-present (CNP) transaction, retailers must deal with fraudsters that are lurking around waiting to strike. While BOPIS fraud is still marginal as compared to other e-commerce fraud, it is on the rise.
BOPIS fraud is fast evolving as a ‘flavor of the moment’ fraud and a huge challenge for retailers.
Until recently when digital was still not the norm, fraudsters would use stolen credit cards to buy goods in store. In came e-commerce, and fraudsters began using stolen credit card details to buy goods online and having them shipped to a forwarding address. This method was risky, as fraudsters would still need a delivery address, which attracted checks and fraud control measures. To bypass such scrutiny, fraudsters would contact the delivery service to hold the goods for a later pick up. Some fraudsters got the items delivered to a PO box. But it was still a complex process.
Fraudsters then began exploiting BOPIS loopholes. They bought goods online (of course using stolen credit card details) and requested for in-store pick-up, using delegates (something like the money mules) to pick up the items the same day. Since fraudsters are savvy enough to create fraudulent identities easily and cheaply, they can clear the retailers’ verification processes, at pick-up, with these fake identity proofs. As a result, BOPIS fraud is fast evolving as a ‘flavor of the moment’ fraud and a huge challenge for retailers.
Here are how fraudsters are exploiting some of the existing BOPIS loopholes:
Multiple Identities: Most retailers have separate, siloed systems for online and in-store purchases that do not communicate with each other. This makes it difficult for retailers to accurately verify customer credentials and flag potential fraud. Fraudsters exploit this loophole by using multiple fake identities to buy numerous identical items and pick them up from a variety of retail outlets.
Bypass Scrutiny: Today’s tech-savvy and sophisticated fraudsters have come to reverse engineer fraud detection systems by finding a way around security reviews that retailers employ in the form of price or volume thresholds. For instance, if the price threshold is set for purchases of $1000 or more, fraudsters would purchase items below that amount. Or, if the volume threshold is set to no more than 10 items, fraudsters would buy 9 or less items.
Timing of fraud: The BOPIS risk multiplies during the holiday season as the volume of transactions peaks during this period. Knowing that retailers will have a hard time verifying large volumes of purchases and in-store pick-ups, this is an opportune time for fraudsters.
Gear Up to Fight BOPIS Fraud This Holiday Season
Verifying or identifying suspicious BOPIS purchases is particularly difficult, because retailers do not have adequate data points in real time—such as knowing whether a billing address is different from a delivery address. Even checking identity proofs such as a credit card or driver’s license proves no good as they too can be easily faked. To fight BOPIS fraud, retailers can deploy specialized controls—including delivery type, delivery speed, product category, and product SKU(s)—on items picked up in store and examine altered identity elements such as a new phone number or email address.
Since both retailers and their customers benefit from BOPIS, retailers find themselves caught between the devil and the deep sea, as they must also proactively fight fraud and address this omnichannel risk. Retailers are realizing that to make the most of the holiday season and use BOPIS to gain a competitive advantage, they must prepare adequately to fight fraud with technology-driven smart solutions to fortify their defenses for a happy experience all around.
Simility, a PayPal service, has been helping retailers across the globe to protect themselves and their customers by proactively fighting sophisticated e-commerce fraud through its Adaptive Decisioning Platform.
This omnichannel, smart fraud prevention platform provides retailers with a flexible, intuitive, and visually configurable solution that uses transaction, device, and customer data together in real time. By correlating patterns and unearthing suspicious activity at signup and transaction, retailers can proactively sieve and block fraudulent online purchases early and reduce manual review at the delivery point. Retailers can, therefore, successfully balance fraud prevention and ensure a seamless customer experience.
To learn how Simility, a PayPal service, can help you prepare to fight fraud confidently and spread cheer through a seamless customer experience during the upcoming holiday season, schedule a demo now.