‘Friendly fraud’: Online retailers are grappling with new forms of digital deception

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It’s an abiding retail maxim that the customer is always right. The credo tends to work well for the retailers that follow it — except, of course, for those occasions when the customer is actually wrong, deliberately. Retailers have long dealt with theft-related fraud at their stores, but newer forms of digital deception have proliferated in recent years amid higher online sales and improved security techniques at bricks-and-mortar stores. Fraud losses as a portion of retailers’ online revenue rose to 1.47 per cent in 2016 from 1.32 per cent last year and 0.68 per cent in 2014, according to a report by LexisNexis Risk Solutions, a risk management firm in Atlanta. Retailers generally don’t like to talk about how much they’re losing to online fraud, but it’s a new facet of a very old problem, said Michael LeBlanc, senior vice-president of Marketing and Digital Retail at the Retail Council of Canada.

By: Hollie Shaw
Read the full article on The Financial Post.