For too many UK home shopping firms, tackling false Goods Lost in Transit (GLIT) claims remains a double edged sword – be too accepting of the customer’s word and fraudulent claims slip through the net; be too aggressive and honest customers with legitimate complaints feel treated like criminals and take their business elsewhere.
Goods Lost in Transit (GLIT) fraud: a new retail threat for a new technological age
Since the dawn of the market economy, scam artists have found increasingly sophisticated ways of getting goods for free. I’m sure the stone-age scammer distracted the local rock cutter while an accomplice pocketed a few flint arrowheads. And as the modern retail business has grown and evolved, so the trickery of swindlers has progressed.
Now, as we move more fully into the internet age with high-tech retail technology, a whole range of new scams are being dreamed up – and it’s not just the professional criminals who are taking advantage of the new state of play in the marketplace.
With high-speed internet access becoming omnipresent – and feeding phenomenal growth in home shopping – the way many brands interact with consumers is changing fundamentally. Online shopping has enabled the retail world to offer real-time remote browsing and buying without customers ever having to set foot in high street stores.
The latest Transactis Home Shopping Index research is now available
Our latest Home Shopping Index research shows that the internet shopping boom is levelling off as the channel reaches full maturity, with just an 8% growth from last year. The growth is down from its rise of 20% in 2009, 35% in 2008, and 58% in 2007.
Come and see us at ECMOD!
We are delighted to be involved once again in the ECMOD Direct Commerce Show, which is being held this year at a stylish new venue, the Business Design Centre in Islington, London, from Wednesday 30th November to Thursday 1st December.
Now in its 21st year, the ECMOD Direct Commerce Show serves the catalogue, home shopping and multi-channel retailing community togehter with B2B distributors and pur play online businesses. The event is also home to the CatEx DCA Village – where you will find the Transactis stand at space number 10.
The exhibition is free to attend and you can register here.
The multi-track conference part of ECMOD covers a vast range of topics that are all geared toward helping both B2C and B2B retailers and multi-channel merchants to optimise their business performance. We’re hosting two sessions this year:
Wednesday 30th November 16:30 – 17:30
Michael Green, our Director of Insight, presents Right Product, Right Channel, Right Time – in Simple Steps:
Integration of multi-channel data need not require wholesale systems development. In this session discover how to generate highly personalised campaigns and yield the increased conversion rates that have long been promised, but not often experienced.
Thursday 1st December 14:45 – 15:30
John Sharman, our Commercial Director of Fraud Services, presents Customers Behaving Badly:
Discover valuable insights about fraud from our market-wide benchmarking study which combined transactions, goods lost in transit claims and claims outcomes from a number of large multi-channel retailers. With clients experience and research findings to share, John will explain what is happening and what your business can do to protect itself from fraudsters.
Download the full conference programme here.
You can book your place by calling 01271 866112, emailing rhi@ecmod.com or by completing this conference booking form.
Retail Fraud On The Road – watch our masterclass presentation
With over 300 delegates and a fantastic response to our masterclass session, this year’s Retail Fraud On The Road was a great success.
The post-event website is now live here and you can view or download John Sharman’s presentation, “Goods Lost in Transit – an unavoidable cost of distance selling, or customers behaving badly?” by clicking here.
Return fraud – the unseen theft
It’s amazing what crawls out when you start looking under rocks…while researching the extent of retail fraud in the UK, I found the following forum post – proof that fraudsters are actively targeting retailers and openly discussing how best to take retailers for a ride. In the post, the enterprising would-be fraudster is asking fellow forum members which consumer goods are best to use for committing return fraud:
Ok so my friend’s hairdressers associate that he met once on a staircase would like to raise some cash by shoplifting, returning, buying gift cards with the store credit and then selling the gift card to plastic jungle.
He wants to know which items would be best to do this with, preferably moderately priced items (10 to 30 pounds) that would be easy to steal and easy to return, these items should not be tagged and should be typically in a low shoplifting area of the shop. e.g. kitchenware.
I’m trying to think of more examples but having difficulty, which is the reason I decided to make this thread, ideas people PLEASE!
What follows is a host of “top tips” on what to return, and also on this site are various other threads, covering things like which retailers have the best (for the fraudster) returns policies, return fraud online and even a detailed “How to commit return fraud”. It’s like eHow for fraudsters. I was astounded how brazen people can be when they are confident they can get away with it. One post discusses why the Xbox 360 isn’t a good bet for return fraud, with one response saying “This should probably be in the shoplifting thread, but anyway” – nice to see the moderators are attempting to police their forum!
This shows that retailers are being deliberately targeted for returns fraud – in this case, face to face returns in the store. This kind of scam, along with fraudulent returns for goods purchased online or by mail order, contributes to the massive (and yet largely ignored) overall cost of return fraud for retailers – something estimated to be costing over $13 billion for US retailers in 2010. According to the Retail Fraud Survey 2011, false or fraudulent returns also represent a significant problem for UK retailers and average 0.17% of sales and almost 20% of total shrinkage. No wonder return fraud has been dubbed “The biggest crime you’ve never heard of” !
The challenges faced by retailers when it comes to tackling fraud losses are numerous, especially now the fraudsters can go online and share detailed advice on how best to commit these crimes. There’s a fine line between maintaining goodwill with genuine customers and making sure fraudsters like these don’t get chance to fleece you. I’m looking forward to sharing these and other war stories with everyone at Retail Fraud on The Road next month.
