With Valentine’s Day fast approaching, people around the world are surely starting to panic about finding the perfect gift for their partner. In some industries, Valentine’s Day represents barely a ripple in the year’s flow. Still, for others, it’s a major milestone representing a great business opportunity that comes with the risk of digital fraud.
Valentine’s Shopping is Short, But Can Be Intense
The Valentine’s Day shopping spree is typically one of the shorter holiday shopping seasons in the year, usually about 10 days for most involved merchants (though, in some cases, it can stretch to starting a couple of weeks before the big day).
This puts a lot of pressure on companies in relevant verticals — luxury, jewelry, flowers, food, etc. — to provide seamless service that ensures everything is delivered on time. That can be very challenging for fraud teams who still rely on manual review. It’s rarely worth hiring additional staff for such a short period, but customers who can’t give their gifts on the day are unlikely to be forgiving.
Fraud teams need to be planned and prepared ahead of time so that they can run smoothly when the orders tick up.
Gift-giving Can Confuse Fraud Prevention
One of the challenges of Valentine’s Day is that it’s all about gift-giving. That’s a beautiful thing, of course, but it means consumers shop on sites they don’t normally visit for goods they wouldn’t usually buy. In fact, Forter’s data from past years indicates that during that key 10-day period, sites that sell Valentine’s-related items are up to 2.5x more likely to see new users at checkout.
That poses a challenge for teams working to make sure that customers get as smooth an experience as possible because they are less likely to have much valuable historical data to draw on to determine what sort of experience they should be providing for a user and whether they’re legitimate.
Working with providers who see the big picture of online purchases can mitigate this problem, as can collaborating as part of a consortium with other retailers to share knowledge and build confidence in which users should be fast-tracked, which should be rejected out of hand, and which need a more nuanced approach.
Valentine’s Day Shipping Challenge
The gift-giving challenge continues when it comes to shipping. Some people order the items at home to present the gift in person on the day. But in the past, Forter has seen that orders for Valentine’s-related items during the relevant period are up to 3.5x more likely to be sent to an address different from their standard one than during the rest of the year.
This indicates that some shoppers send the gifts directly to the beneficiary, especially if they happen not to be in close proximity at that time. Someone may also send gifts to a mutual friend who can help arrange it for the right moment. If you want to keep something a surprise or arrange for an office friend to slip it onto his or her desk at work, sending it to someone else is a strong option.
Valentine’s Day is also relatively likely to have people sending something to an address they haven’t used before, unlike the winter holidays, where a returning shopper is more likely to send to similar people year after year.
Shoppers are also slightly more likely to use a different payment method than their usual one in Valentine’s Day shopping, perhaps because they’re trying to maintain the element of surprise and so avoid shared bank accounts or cards.
Payments, digital experience, and fraud teams need to race to ensure they allow legitimate orders through while blocking the ones where a fraudster is trying to take advantage of the situation by sending to an address they control. It’s vital to get that balance right because, as the 2024 Trust Premium Report found, consumers care a lot about shipping. In fact, 95% chose shipping policies as an essential factor when they’re deciding where to shop.
Valentine’s Day is a Time to Show Good Customers Some Love
Valentine’s Day is a time with many feelings, and most of those feelings are very positive. It’s great to connect your brand to these warm fuzzies by providing a fantastic shopping experience for good users.
Moreover, when it comes to wooing new users, it’s an ideal opportunity to convince someone who doesn’t typically shop with you that you’re a great source of gifts for the special person in their life.
It’s like a relationship. Customers are looking for the right “click,” which means a shopping experience that feels consistent, coherent, and smooth, with all the options they expect to see. In other words, they want to feel as if you know them.
In that sense, finding the perfect balance between avoiding false declines and preventing fraud comes down to understanding customers’ identities. You need to know if their behavior, device profile, and connections to other instances of the same or similar information elsewhere on the internet reflect a customer you need to stay away from or one you want to love your brand forever.
Doriel Abrahams is the Principal Technologist at Forter and host of ‘What the Fraud?,’ where he monitors emerging trends in the fight against fraudsters, including new fraud rings, attacker MOs, rising technologies, etc. His mission is to provide digital commerce leaders with the latest risk intel so they can adapt and get ahead of what’s to come.