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Every $100 of Fraud Costs Merchants $308, up from $279 in 2013 According to LexisNexis Risk Solutions Study

Cost of Retail Fraud Jumps 10% over 2013, Marking Three-year Upswing

Atlanta – WEBWIRE

LexisNexis® Risk Solutions released today its sixth annual True Cost of Fraud(SM) study, which reveals that fraud is eating deeper into retailers’ revenues. Merchants lost 0.68% of revenue to fraud in 2014 in comparison to 0.51% in 2013. Losses are on the rise as fraudsters dramatically increased their efforts, often overwhelming merchants.

Another driver causing the cost of fraud to rise to $308 (2014) from $279 (2013), a 10 percent increase, is retailers’ forays into the mobile channel, which is now a must-have tool to reach and engage customers. As the mobile channel grows, fraud is growing right along with it. This year’s study results indicate that mobile channel fraud costs merchants $334 for every $100 of fraud loss. Internet Retailer’s Mobile 500 states that sales through mobile commerce of the world’s top 500 retailers should reach $84 billion by the end of 2014. Many of the tools that are designed to stop fraud in the eCommerce channel aren’t always as effective in the mobile space.

Dennis Becker, LexisNexis Risk Solutions vice president, said,  “There is a significant amount of money at risk for retailers;  as retail buyer behavior shifts to other channels, like mobile, it’s important for merchants to strike a balance by having the right tools in place that reduce customer friction while helping prevent fraud.”

The study also indicates that large eCommerce merchants are among the most at risk of fraud compared to other types of merchants. Even though their general fraud awareness and use of existing fraud solutions is high compared to all merchant categories, large eCommerce companies have reduced the number of fraud solutions that they use: four solutions in 2014 versus five solutions in 2013.

The LexisNexis study measures the economic impact of the following:

  • Fraudulent and/or unauthorized transactions,
  • Fraudulent refund/return requests and bounced checks,
  • Lost or stolen merchandise, redistribution costs of redelivering purchased items (carrier fraud).

The study was conceptualized by LexisNexis Risk Solutions and executed by Javelin Strategy & Research via an online survey using a U.S. retail merchant panel composed of 1,142 risk and fraud decision-makers and influencers. In addition, in-depth interviews were conducted with risk and fraud executives at five financial institutions to obtain their perspective on fraud issues.

The full study is available at this link:

About LexisNexis Risk Solutions
LexisNexis Risk Solutions ( is a leader in providing essential information that helps customers across all industries and government predict, assess and manage risk. Combining cutting-edge technology, unique data and advanced scoring analytics, Risk Solutions provides products and services that address evolving client needs in the risk sector while upholding the highest standards of security and privacy. LexisNexis Risk Solutions is part of Reed Elsevier, a leading publisher and information provider that serves customers in more than 100 countries with more than 30,000 employees worldwide.

LexisNexis’ retail industry solutions assist organizations with protecting revenue, maximizing operational efficiencies and predicting and preventing retail fraud.

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