Although experts at eBay Enterprise expect fraudsters to step up their game during the holiday, the e-commerce processor sought to debunk top holiday fraud myths to keep retailers from getting too cautious.

Looking at data from the orders it processes, eBay concluded that criminals are becoming more creative in where, when and how they take advantage of the holiday season, when the number of fraudulent purchases increase proportionately with sales peaks.



In general, digital gift cards shouldn’t be viewed as too risky to sell just because they are the equivalent of cash, eBay said. The volume of good orders for digital cards outweighs the fraudulent attempts. What the fraud experts noted was that digital-gift-card fraud is highest on New Year’s Day, when legitimate consumers exchange unwanted presents for digital gift cards.

Greater distances and quicker shipping options do not guarantee a higher rate of fraudulent orders, just as shorter distances and slower shipping do not translate into legitimate orders. EBay Enterprise found from its data that fraudsters “hate to wait more than one day for their purchases” and that “orders shipped with second-day delivery during the holiday season generally have low fraud rates.” Because criminals try to fit in with consumer buying trends, fraudulent orders with overnight shipping spike on Christmas Eve, typically when procrastinators make their last-minute gift purchases.

While improved technology is becoming more important to combat unauthorized online activity, eBay Enterprise said merchants should keep in mind the value of manual reviews. “There are nuances in some good orders that even the most sophisticated computer programs mistakenly label as fraud,” the e-commerce processor said.

EBay also said that more than 97 percent of orders shipping internationally on its network are legitimate. Further, freight forwarders known as mail-forwarding companies have a higher rate of shipping good orders than their negative reputation in some e-commerce circles might suggest, although some product categories such as jewelry probably warrant greater scrutiny. In addition, orders shipped to certain coastal areas might also warrant attention since they can be more easily shuttled overseas.

EBay has a stake in ensuring that retailers partner with an e-commerce processor such as itself, but argued that it was useful to debunk these myths so merchants do not become so overly cautious and kill good orders.