That time of the year has come again, yes, Black Friday is right out the door! Excited? Everyone’s excited about the incredible discounts that we all can benefit from, but let’s talk about business. Are you ready for the enormous amounts of data piling on internet? Big data and financial data will peak once again this year due to the millions of orders all over the world. Naturally,fraud prevention on Black Friday is a high priority for both sellers and shoppers. During Black Friday, most online retail websites’ traffic increases by ten times on average. Sadly, most of them doesn’t have the infrastructure to handle that kind of a traffic. In order to be safe from fraud on Black Friday 2021, we have some tips for you!
History of Black Friday: How it started vs how it’s going?
Although it’s a global shopping trend today, Black Friday originated in USA at first. It’s the day after Thanksgiving Holiday and on a global scale, it’s been in our lives since early 2000s. The term originally dates back to 60s. The trend started as Black Friday, and today it evolves to Black weekend, Black week and even Black month for some brands. This change itself is a proof of the high demand.
The shift from brick-and-mortar stores to online shopping rapidly escalated with COVID-19. There were already people who like to shop from the comfort of their home, especially GEN-Z. However, keeping your social distance with crowds has become much more important recently. As we all know, “digital” is one of the most popular words of our world currently.
Although it provides great comfort, this convenient way of shopping may bring new issues to surface for retailers on Black Friday. You may be thinking of logistics problems such as supply chain issues, late deliveries etc. but fraud prevention on Black Friday should be on top of your list. In today’s digitalized world, fraudsters are getting digitalized as well!
Expectedly internet traffic and online sales on Black Friday broke records in 2020. In 2021, with the rising popularity and habit of e-commerce, numbers are expected to go even higher. E-commerce statistics suggest that last year, in 2020, brick and mortar sales decreased by 23.9% over 2019 while the online sales revenue on Black Friday 2020 went up to $9.03 billion from $7.4 billion. In 2021 the online sales revenue is expected to surpass $10 billion.
How to Get Ready to Sell?
Obviously, it is one of the most exciting times of the year for the retailers. You can double, triple or even quintuple your earnings on Black Friday. Of course, the sky is the limit! However, you must get ready to deal with the crowd of customers, as well as the fraudsters hiding among your real customers. According to Financial Times, in 2020 around Black Friday, the fraud rate went up by 385% compared to 2019. The numbers sound unbelievable but not very surprising. Here’s a list of how to protect your business and customers from fraud on Black Friday:
- Reinforce your website infrastructure: As we mentioned earlier, most websites are having a hard time on Black Friday because of infrastructural issues. You should get your team and website ready to deal with the increased traffic volume. Working on your backend is the first step to be safe.
- Get Help from Artificial Intelligence/Machine Learning Technologies: When it comes to fraud prevention on Black Friday, artificial intelligence and machine learning technologies may be your best friend. These technologies can detect abnormal behavior based on past data. To deal with fraud on Black Friday this year, use your data from past years. Feed it to your machine learning engine and let it be your number one fraud detector. By using outlier detection methods, you can detect fraudelent actions that don’t fit to present shopping trends more accurately compared to standard rule-based methods.
- Watch Out for False Positives: Don’t mix up “abnormal behavior” with crazy holiday shopping. Black Friday is one of the biggest shopping events. Due to the increased volume, it will be harder to detect abnormal behavior and the chances are higher that you don’t accept a payment from a loyal customer. In order to prevent false positives, best practices are multi-step identification systems and once again getting help from AI technologies.
- Get Ready for Account Takeovers: Your website might be used as a front website for phishing scams. We already know that fraudsters establish fake websites and offer fake deals in order to phish. However, they also try to take over other websites’ management to steal the customer data from them as well. Warn your relevant team to get ready for these attacks.
- Expand your Query Limits: Probably you have regular query limits from your bank and payment processing systems. Yet, your standard limits may likely to not serve your Black Friday needs. So, you should get in touch with both your bank and payment processing partner to expand your limits.
What to do the day after Black Friday?
The chaos is over! Once again you survived Black Friday, congrats! You probably earned well too. Now it is time to make sure that there is no shady business. Here’s how you can protect your earnings and personal data of your customers:
- Be Careful about the Refund Fraud: Warn your customer service team first of all. Probably they will be the busiest bees in your team after Black Friday. Refund or return fraud is a concept that fraudsters practice in many different ways. They might try to return stolen goods, or they may try to use a receipt that belongs to another customer in order to get the money refund from you.
- Analyze Data: You should carefully analyze your data of Black Friday 2021 and store it safely, so that you can be ready for next year. Analyzing sales and marketing data is already crucial for your business. You can also see your regular customer behavior on holiday shopping and make use of this data to determine a standard for Black Friday customer behavior.
- Get in Touch with Your Fraud Prevention Team: Time to get in touch with your fraud prevention team and see what you can do better on Black Friday 2022! Go over the fraud cases detected by your team and similar to figuring out a standard customer behavior, see the non-standard shopping behavior.
Black Friday may be a rush, but we hope our tips will help you stay safe while enjoying one of the most profitable days of retail industry! If you want to learn more about fraud prevention on Black Friday, you can download our ebook [Graph Analytics for Fraud Detection] for free.