E-Commerce Sales See Gains in July, But So Does Fraud, Says ACI Worldwide

The Covid-19 pandemic in July fueled a sharp rise in e-commerce but also in fraud, according to the latest figures from ACI Worldwide Inc. 

Global e-commerce transactions rose 19% in July over the same period a year earlier. Fraudulent transactions by value rose 4.4%, up from a 3.7% increase in the same period in 2019. The average ticket for fraud jumped $10 from January through July 2020, compared to the same period in 2019, according to ACI’s figures.

Driving the increase in e-commerce sales is the convenience of making a digital purchase, a trend that is expected to continue even as more merchants reopen their doors with restrictions that limit crowd sizes. “As more brick-and-mortar stores reopen with Covid-19 restrictions, we are seeing card-present transactions slightly increase. However, we expect the e-commerce trend to continue post-Covid as consumers experience the convenience and speed of digital payments,” Debbie Guerra, executive vice president for Naples, Fla.-based ACI Worldwide, said in a statement.

In addition, some consumers who may have never shopped online before are also experiencing the benefits of e-commerce and will likely continue to use it even after the pandemic, ACI’s study indicates.

One way to look at the uptick in e-commerce sales is that the trend was well-established prior to the Covid-19 pandemic, ACI executives say. “What Covid has done is accelerate the trend,” a spokesperson says. “We see this in digital banking too. The shift that many expected to see in the next few years has happened within a few months. The trend was moving in one direction before Covid, so we believe that shift will be a permanent one.”

While overall e-commerce sales remain strong, the categories of goods that are performing the strongest continues to change, according to ACI’s data. For example, in March there was a surge in sales of personal protective equipment, such as face masks and shields, as well as electronics and home office supplies, as countries around the world imposed lockdowns. In July, there was strong growth in sales of outdoor equipment and sporting goods. The ebb and flow of categories seeing sales surges suggests that, although there will be fluctuations across segments and geographies, the pandemic itself continues to play a significant role in increased e-commerce sales, according to ACI’s data.

So far in 2020, e-commerce sales in the United States are up 13% from a year earlier, thanks largely to more consumers purchasing materials for do-it-yourself projects and spending on apparel, alcohol, digital downloads and gaming, which increased 52% during the period. Retail e-commerce sales rose 48% during the period. PPE remains a popular item, with consumers spending an average $52 per order in July.

While consumers are purchasing more often through e-commerce channels, they are spending less per order. The average e-commerce ticket between January and July of this year fell by $26 compared to a year earlier. 

Despite the overall increase in ecommerce spending, some merchant categories that have been hit hard by the Covid-19 pandemic saw decreased spending in July, according to ACI’s data. Travel spending was down 16% for the month and ticketing was down 86%.

The jump in fraud values is due to criminals targeting higher-value items such as electronics and luxury-brand names. In addition, that type of fraud is becoming more prevalent in newer sales channels such as curbside pick-up and parking-lot pick-up, Guerra says.

Non-fraud chargebacks increased by 23% in June 2020, the most recent data available, compared to the same period in 2019. Chargebacks typically take 45 days to process, which is why data for July is not yet available, according to ACI.