Yofi Feature Announcement: Integration into POS & Warehouse Management Solutions
Yofi expands to POS and Warehouse Management, enhancing return abuse detection, anomaly detection, and logistic efficiencies.
The Yofi team attended the National Retail Federation's Conference and fully immersed ourselves in a world of innovation and the latest trends in retail. Naturally, there was a ton of buzz about artificial intelligence and personalization, but one of the most prominent and universal themes was Abuse, Loss Prevention, and Retail Shrinkage.
Our team had the unique opportunity to engage directly with some of our customers and interact with several of the world's largest retailers. These conversations underline the constantly evolving challenges of identifying bad actors and ways that retailers are attempting to adapt to mitigate the impacts of abuse and loss.
Here are 6 of the largest ongoing and growing trends in Retail Abuse:
1) Abuse as a Service: This trend highlights a growing shift where professionals offer 'as a service' schemes to enable retail abuse. These services range from collecting a percentage fee for a successful "did not receive a package" to botting exclusive releases, making it easier for even non-tech-savvy individuals to engage in retail abuse.
2) Fake Receipts and Invoices: Bad actors purchase or create fake receipts and invoices to facilitate returns or warranty claims. This trend is growing, especially with the utilization of generative AI to create seemingly identical receipts and documents.
3) Fraud DDOS: Fraudsters are using fake credit cards that will get automatically declined by any fraud solution, with the sole intent of the brand incurring pre-authorization and payment charges (~2.5-3% of the total transaction). Strangely, the fraudsters gain no discernible advantage outside of malicious intent to raise costs for specific retailers.
4) Gift Cards Abuse with Social Engineering: Bad actors are deciphering gift card generation algorithms, but mainly calling employees or customer support with fake claims to get a gift card. Once the individual receives the gift card, it provides a free purchase for individuals. These bad actors increasingly use generative AI to automate their phishing attacks.
5) Returns and Refunding: This was one of the hottest topics at the conference, with every retailer looking to curb the cost of returns, especially with the exponential rise of return abuse. Tackling return abuse is challenging because it is multi-dimensional, encompassing many variations of free return policies, wardrobing, return as a service with fake claims of INR, and counterfeit returns.
6) Public Groups & Reselling Expansion: Historically, everyone associated reselling with concert tickets, exclusive sneakers, and luxury products; however, this has rapidly changed with resellers targeting virtually any product where there's a profit to be made. These resellers are working together in public groups and online forums to openly discuss strategies and coordinate their efforts, making the reselling market more accessible and visible than ever before.
Our key takeaways from NRF highlight a crucial message for businesses: retail abuse and loss prevention are fast-evolving fields that demand immediate and proactive attention. From 'Abuse as a Service' to the complexities of returns and reselling, the landscape of retail abuse is diverse and challenging.
Businesses must be vigilant and adaptive, leveraging technology and innovative strategies to outpace these threats. Staying ahead in this dynamic environment is essential for safeguarding profits, maintaining customer trust, and ensuring data integrity.