Many Americans fall prey to activities that involve tricking retail establishments for profit. For example, you buy some item but do not wish to incur the associated charges. In response, you submit a claim to the seller explaining that you never received the said product or got the item in error. This growing trend is known as digital shoplifting and is becoming a problem for many businesses.
Digital Shoplifting
The actions described discuss a growing crime known as digital shoplifting. According to research conducted by Secure, a digital fraud prevention tech company, half of the Generation Zers and millennials surveyed with incomes exceeding $100,000 per year admit guilty of committing such misdeeds. Secure surveyed study subjects during the week of December 6-13, 2024, and concluded that digital shoplifting is far more serious than anyone might believe.
Why Are the Wealthy Engaging in Such Acts?
Ory Snir, Socure’s head of product management for fraud and identity solutions, believes that a connection exists regarding why wealthier subjects tend to partake in digital shoplifting. Snir said that he thinks said individuals do so because they feel they possess a greater understanding of banking and merchant obligations and the loopholes within such mandates.
Primary Examples
Digital shoplifting may include claiming a package never arrived, or reporting said item stolen by disputing charges made by the seller or the perpetrator deliberately stating that they never purchased the product.
Those engaging in this behavior justify their actions by blaming economic trends like inflation or claiming that such acts have become so commonplace that social media personalities routinely post entries explaining how consumers can get their money back from online purchases.
Faaresq, a TikTok influencer with almost 3 million followers, explained how to obtain refunds from Amazon Prime by claiming that product delivery was delayed.
Not Only the Young and Wealthy Are Doing It
While the problem seems most prevalent among the younger, wealthier set, it is not ignored by individuals representing almost all age and socio-economic groups. People across all generations have confessed to first-party fraud when consumers dispute charges with their credit card companies, and merchants refund their money for products they rightfully ordered and received.
Little, if Any, Consequences
The crime continues almost unchecked because the alleged perpetrators face few consequences.
“The best-case scenario is just the person goes unpunished and gets away with it entirely, which often leads to them doing it again,” said Snir. “Another potential outcome is that their dispute gets turned down and they ultimately have to pay for the purchase. The worst-case scenario is that a perpetrator’s account gets blocked, preventing them from making any further purchases.”
Impact Upon Merchants
Digital shoplifting is not a victimless crime. Charge-backs cost retailers almost four times the actual transaction value in associated damages such as lost revenue, charge-back fees, higher overhead costs, damaged relationships with credit card companies, banks issuing debit cards, and other purchase-authorizing networks.
Snir believes merchants must proactively strengthen their purchase verification processes and collect more information about individual customers before authorizing purchases.
The crime cannot indeed be enforced unless the victims of said infraction take it seriously enough to take the actions needed to prove it. Snir believes merchants can no longer sit back and incur the financial outcomes of such events. Efforts can be undertaken. However, product sellers must be willing to partake in said activities.
“Fight back,” Snir said. “Gain evidence that the consumers themselves are making the purchases by collecting further information and use that to deny claims or charge-backs. Doing so will help to prove that these purchases are legitimate.”
