eCommerce Fraud Trends, Post Covid

Megan Blissick Interview with Absolunet and Signifyd

An Interview with Megan Blissick from Signifyd.

After their $205 million funding round in April of this year, Signifyd, one of the largest eCommerce fraud protection solutions on the market, is closely tracking shifts in consumer behavior.

We talked with Megan Blissick from Signifyd about this new era of consumer habits and what it means for merchants. In this interview, Blissick covers: 

  1. The permanent shift in customer behaviors. 
  2. How fraud continues to be a major issue (6x pre-pandemic levels during the initial shutdown and now at 3x pre-pandemic levels).
  3. How Signifyd is helping merchants optimize revenue across borders and with direct-to-consumer.  

Changing Business Models

Absolunet: Signifyd’s CMO Indy Guha gave some pretty jaw-dropping numbers at your annual Flow event: 

  • In just 1 year, there was a 50% average revenue growth rate in eCommerce and +120% growth in digital. 
  • D2C went from less than 10% to 30% of business.
  • Cross-border commerce went from 5% to over 10%.

Megan, how did the Signifyd team gather that data? And how did you react to the numbers?

HubSpot Video

Signifyd works with over 10,000 merchants in over 100 countries. When the pandemic first hit, we set up a Signifyd Pulse dashboard. The dashboard looks at 13 industries like home decor, sporting goods, and more. In the first few weeks of the shutdown, we saw certain categories go up dramatically and other categories completely bottom out. Luxury goods were tanking, apparel purchases under $250 were contracting, while leisure and outdoor were spiking.

There was a huge overall shift to eCommerce; there was no other way to shop. 

The team at Signifyd knew we had to double down to make sure the companies we work with had fully fleshed out eCommerce strategies. The merchants who had the omnichannel basics in place were best prepared to adapt. 

21% of shoppers want to stop visiting shops - and other trends

Customer behaviors have permanently shifted and customers have higher expectations. According to Signifyd: 

  • 21% of shoppers expect to stop shopping in physical stores. 
  • 50% want to reduce the amount of time spent in stores.
  • ½ will continue doing their shopping online.
  • ⅓ love BOPIS. At the height of lockdown, 80% of orders were handled through curbside pickup. That’s come down to 40%.
  • ¼ of consumers want to use curbside pickup.

Curbside pickup is a great example of higher customer expectations. We heard about how a major sporting goods retailer put up a sign in their window that said “call this number and we will bring your order out.” And now, curbside pickup has become an expected offering. Even grocery stores are doing it.

It highlights the importance of listening to your customers and adapting to meet their needs. These omnichannel and multichannel experiences are something customers have been requesting for a while. 

False consumer claims hit 6x pre-pandemic levels - and other trends in fraud

Signifyd reported that at some points last year, fraud was at 6x pre-pandemic levels. It is currently hovering at 3x. 

You’ve also called out that the nature of fraud is changing, with: 

  • 146% more bot attacks to pressure systems. 
  • consumer abuse (false claims of item not received, item came damaged, and item significantly not as described) at 5x pre-pandemic levels.
  • professional refunders pressure testing return logistics, 
  • and 13% of consumers reporting that they feel okay stealing from companies.

Megan, can you talk us through this? What is friendly fraud? 

HubSpot Video


Megan: To give the lay of the land: there’s the typical type of fraud that we are all familiar with, like when someone steals your credit card and makes purchases or account takeovers when someone figures out your password, kicks you out of your account and buys things with saved information.

There’s also the notion of friendly fraud. These are good purchasers that are engaging in bad behavior. So-called “friendly” fraud has really increased during the pandemic. The two most prevalent claims are “item not received” (11% of chargeback volume) and “significantly not as described” (8% of chargeback volume). 

This is a tricky dynamic to navigate. Deliveries get taken off of a porch or from a lobby. Merchants risk gravely insulting their customers by saying “I think you are lying.” That customer might be out their money, out their product, and now they hate your company. You have to be compassionate and caring for these customers. 

From the merchant’s perspective, they are out the product and out the money. Signifyd saw the opportunity to offer a solution. We started providing coverage for “item not received” claims. When an Item Not Received claim comes in, we cover the full expense and perform a chargeback investigation to find out if the claim was legitimate or fraudulent. This allows merchants to shield themselves from insulting customers while also protecting their bottom line.

Dealing with fraud across borders

With cross border selling going from 5% to over 10%, that type of guarantee must really create peace of mind for merchants. 

HubSpot Video

When we guarantee an order, we say this is a legitimate customer. If we are wrong, we pay the merchant back for the cost of product, shipping, taxes, fees, and duties. We will make the merchant entirely whole. This is what enables things like cross border commerce. 

Cross border commerce sees the same fraud levels as domestic commerce, but rejection rates from the merchants are 3x higher. Merchants have to account for duties, fees and currency exchanges. Plus, the chance of recovering a stolen product across borders is a lot harder. There’s a bigger risk. 

When we first started offering guarantees, it was because we saw good orders that merchants didn’t have the confidence to ship out. These were often high order values. We do guarantees for orders that are up to six figures and merchants see a 4-6% revenue increase by letting more customers through. 

The Direct-to-Consumer Trend

Signifyd has traditionally worked in the retail space. Has that changed? 

Megan:  A lot of traditional B2B sales are shifting online. Distributor relationships are based on in-person interactions. But now, traditional B2B merchants are seeing the value of setting up an eCommerce shop and selling direct-to-consumer. We’ve got huge established brands that have never had their own online presence. Signifyd has started serving manufacturers, especially those who are making their first foray into online and direct to consumer. 

Absolunet: Megan, thanks for walking through all of that information with us! Big changes in the world of commerce. Any final thoughts?

Megan: One of Signifyd’s driving values is compassion. Good commerce experiences are driven by compassion. By paying attention to what your customers are requesting and making omnichannel experiences available, merchants can meet the customers where they are. That’s true for keeping the burden of fraud prevention off customers, creating helpful omnichannel experiences, and selling internationally and direct-to-consumer.


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