Who’s really paying the price for fraud?

Have you heard of Project Kuiper? ICYDK, it’s Amazon’s initiative to provide Internet for space satellites. It’s also a source of intrigue today, as Amazon is suing a Washington state agency to avoid disclosing “trade secrets” about the project.

Is Amazon gatekeeping something?

Fortunately, we’re not. We love sharing, especially information that could help you sell better.

• The price of fraud 🚩
• Be an Amazon superstar ⭐
• Favored payment methods 💳
• Order destinations 🏬

BLACK MARKET

Lenient return policies and weak fraud prevention are a recipe for disaster. And sellers aren’t the only ones suffering.

According to Forbes, legitimate customers are paying the price of rising ecommerce fraud.

⏲️ The ecommerce fraud timeline

• Flexible return policies during the pandemic fostered customer loyalty but also allowed fraudsters to exploit loopholes. Yep, this includes the prevalent return fraud.
• In 2024, retailers project that 16.9% of their sales will be returned, with fraud and abuse accounting for $28 billion in losses.
• Fraudsters now use sophisticated tools like "Fraud-as-a-Service" kits and malicious AI tools to automate scams and outsmart retailers.
• The recent inflation also plays a part in fraud. Even middle-class consumers justify abusing policies due to financial pressures.

The result? Retailers are now forced to tighten their policies, which then affects loyal paying customers. 

⏩ Seller solutions

The good news is you can outsmart fraudsters without compromising customers’ experience. These are what other sellers are doing:

• Impose returns fees to offset the cost of reverse logistics.
• Try the sliding-scale fee for returns. This gives more benefits and leeway for loyal customers.
• Replace refunds with store credit or exchange-only policies to retain your sales. 🧧
• Reduce the refund window to 7 days instead of the usual 30 days.
• Leverage good tech. AI and automation help retailers identify abuse patterns, while data transparency between departments streamlines decision-making.
• Use identity-driven fraud prevention to better differentiate among loyal customers, occasional abusers, and fraudsters.

What fraud solutions are you using for your brand? Feel free to let us know what works best for you by replying to this email. 📩

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BITES OF THE WEEK

• New Scam Alert: Cybercriminals have a new trick that could leave shoppers’ money in shambles.
• Small but Unsustainable: There’s a small number of layoffs in Amazon’s communications and sustainability units.
• Copycats: Can you guess which brands scammers like to impersonate the most?

ECOMMERCE NEWS

Here are the preferred payment modes of shoppers around the world

Interestingly but not surprisingly, shoppers around the world don’t see mobile payment apps the same. InternetRetailing reported that consumers show a clear preference for modes that are familiar and readily available to them.

📊 The stats

According to the RetailX Global Elite Top1000 360° Report 2024, shoppers tend to pay using familiar modes of payment.

• Debit and credit cards top the list.
  • 91% (of consumers) in the U.K.
  • 89% in the U.S.
  • 76% in the UAE and South Korea
• Mobile payment apps are adopted more by certain countries than others.
  • 52% in Brazil
  • 49% in South Korea 
  • 48% in South Africa
  • 29% in the U.K./Australia
• Flexible payment terms (like BNPL) are preferred regardless of the payment model.
  • 53% in the UAE
  • 43% in South Africa
  • 28% in the U.K.
  • 21% in South Korea

🍽️ Food for thought

Knowing your market and customer preferences is important. Otherwise, you might miss out on loyal customers who’ll give you sure sales.

SELLER REFRESHER

Fulfillment centers vs. Distribution centers

Fulfillment centers and distribution centers play a key logistical role in your business. Every product you’re ever going to sell has passed through these centers before reaching your customers.

eCommerce Fastlane provides a quick review of what makes the two different.

💦 A refresher 

• Fulfillment centers store inventory and ship orders directly to customers. Services include stocking, packing, shipping, and returns processing. These services can be in-house or outsourced to third-party providers.
  • Purpose: To handle direct-to-consumer order fulfillment.
  • Size: Vary depending on the volume of inventory. They can be small buildings or large complexes.
  • Services and tools: Fulfillment centers have tools for managing individual orders, including packing stations and handheld scanners.
• Distribution centers store products intended for redistribution to retailers, wholesalers, or other warehouses. It’s basically the “middleman” for manufacturers and retail outlets.
  • Purpose. To efficiently redistribute bulk inventory to other retailers or wholesalers.
  • Size. Distribution centers can’t be small.
  • Services and tools. Distribution centers have equipment like pallet jacks and platform trucks. They may offer specialized services such as refrigerated storage or cross-docking.

⚖️ Both centers have different roles in the supply chain. Knowing their uses and differences allows you to evaluate the pros and cons of each, especially when preparing your shipments.