Pandemic drives surge in BOPIS delivery of retail purchases

Photo by Bruce Mars

Global e-commerce transactions made in December surged 24% in 2020 compared to December 2019, particularly in the sectors of retail (31%) and gaming (90%), new data from ACI Worldwide shows.

While many merchants initially implemented the buy online, pick up in store (BOPIS) delivery channel during the pandemic, those that already had this option available pre-COVID-19 experienced an increase of 70% by volume and 58% by value in 2020.

However, BOPIS fraud has also seen a significant increase, with a 7% fraud attempt rate compared to 4.6% with other delivery channels.

“In 2020, we saw the pandemic drive the highest number of merchants implementing the BOPIS delivery channel for the first time in one year,” said Debbie Guerra, EVP of ACI Worldwide.

“We expect this channel to increase as more consumers get used to the convenience of shopping at home and the speed of in-store pickup,” said Guerra. “However, this is also a channel to watch closely for fraud, as these same benefits appeal to fraudsters.”

Still, ACI’s data also showed that non-fraud chargebacks increased 26% year-on-year in December, driven by shipment delays over the holiday period.

“Non-fraud chargebacks continue to rise since the low that was experienced in April 2020,” said Guerra continued. “Similar to prior years, porch pirates were active in 2020, which impacted the increase in non-fraud chargebacks as fraudsters follow delivery trucks.”

In addition, shipment delays consumers experienced over the holiday period as well as a backlog of returns processing and product back orders have also contributed to the increase in non-fraud chargebacks.

In the fourth quarter, global e-commerce transactions increased 22% year-on-year. For the entire year, transactions in 2020 increased by 19% compared to 2019. The gaming sector increased 84% while retail increased 48%.

Fraudulent attempt purchase value decreased by $10 in 2020 compared to 2019. This was the impact of airline, sporting event and concert ticket purchase declines, which have a high average ticket price. Average value of genuine purchases decreased by $18.

Also, fraud attempt rates by value increased slightly to 3.4%, similar to prior holiday seasons, as a result of increased genuine consumer spending outpacing fraud.