US Retailers May Face Rising Policy Abuse This Summer – Digital Commerce Report

Riskified (NYSE:RSKD), a firm focused on addressing e-commerce fraud and risk intelligence, released the findings from a new pulse survey of 1000 US consumers, providing insights into their attitudes towards the growing problem of “policy abuse,” “whereby consumers knowingly exploit or manipulate a merchant’s terms and conditions for personal gain.”

According to the survey, nearly “a quarter (24%) of consumers report that they are more likely to engage in policy abuse behaviors in the summer, revealing yet another seasonal peak that merchants must prepare for, in addition to the pre- and post-holiday seasons.”

23% of consumers said this behavior “is primarily driven by the desire to spend less on summer activities and purchases, including costs relating to travel and special events.”

The challenging economy is likely to continue “having an impact too, as over half (53%) said an increase in financial pressure makes them more likely to engage in policy abuse.”

Other key findings from Riskified’s policy abuse survey include:

  • Coupon and promotion abuse is the most common form of policy abuse: Unsurprisingly, 58% of American consumers have used multiple email addresses to reuse coupons or discounts. 56% have purchased items with the intention of reselling them at a higher price. 47% have falsely claimed that an item purchased online was never delivered to receive a refund or replacement.
  • Younger consumers and men commit the most policy abuse: This is true across all forms of policy abuse, but most notably with “wardrobing”—buying clothing to wear once with the intention of returning it afterward – with 53% of 18-24-year-olds and 63% of 35-44-year-olds admitting to engaging in this behavior. Men are also more likely to commit all forms of policy abuse than women, but this is especially true when it comes to purchasing an item to resell for a higher price (65% of men vs. 45% of women).
  • Guilt plays little to no part in deterring consumers from policy abuse: While the majority of consumers admit to feeling guilty (54%), the sentiment holds little value as they’ve admitted to actively committing policy abuse anyway. 52% of those who would consider policy abuse in the future also agree that one should feel guilty about exploiting retailer policies, and yet they, too, would engage in these fraudulent behaviors.

Joe Gelman, Product Marketing Manager at Riskified, said:

“There might be seasonal peaks in fraud and policy abuse but in reality, merchants are vulnerable all year round, and abusive behavior is on the rise. When it comes to policy abuse, regular consumers are in the mix with professional fraudsters, making it especially difficult for merchants to strike the right balance between protecting profits and being generous with customers. Merchants partnered with Riskified are ahead of the curve in solving for policy abuse, leveraging our AI platform to detect abuse in real-time and diverting the losses from bad actors towards rewarding their best customers.”

About the survey

The purpose of this research was “to look at consumer attitudes towards policy abuse and understand the reasons behind these behaviors. Commissioned by Riskified, Sapio Research surveyed 2,000 consumers across the UK and US who have committed or would consider committing policy abuse.”

The interviews were conducted “online in May 2024 using an email invitation and online survey.”

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