The management of first party fraud in e-tailing: a qualitative study

• Published in: International journal of retail & distribution management Vol. 47; no. 4; pp. 433 - 452
• Main Authors: Amasiatu, Chioma Vivian, Shah, Mahmood Hussain
• Format: Journal Article
• Language: English
• Published: Bradford Emerald Publishing Limited 24-05-2019; Emerald Group Publishing Limited
• Subjects: Advantages; Chargebacks; Competitive advantage; Consumer behavior; Consumers; Criminal investigations; Customers; Electronic commerce; Evidence; Fraud; Prevention; Prosecutions; Qualitative research; Retail stores; Retailing industry; Retail crime prevention; Consumer fraud; Consumer misbehaviour; Online consumer fraud; First-party fraud; Retail fraud
• ISSN: 0959-0552; 1758-6690
• DOI: 10.1108/IJRDM-07-2017-0142

Purpose
First-party fraud in which retail consumers commit fraud against retailers is a growing problem. However, to date studies on retail crime have focused almost entirely on fraudulent consumer behaviours in physical stores. With the growth of e-commerce, the losses to retailers from this fraud are growing so there is strong need to research this problem from multiple perspectives. The paper aims to discuss this issue.
Design/methodology/approach
The authors conducted three case studies and a total of 24 semi-structured interviews with retail managers, and evaluated their existing prevention-related documentation. Fraud management lifecycle theory was used to organise and discuss the findings.
Findings
The authors found that many retailers are treating this problem as just a cost of doing business online and have no detailed plans for dealing with this problem or any reporting to law enforcement agencies. However, they have begun working with delivery companies for delivery accuracy. Use of convenience stores as collection points is also showing early improvements.
Research limitations/implications
The small number of cases and interviews used is a limitation of this study. However, the authors believe that the findings are useful for advancing knowledge in this emerging research area.
Practical implications
This study provides insight into existing management practices in this domain, and makes recommendations on how to improve the management of first-party fraud. The study also makes a case for increased managerial interest and involvement in reducing first-party fraud. The study also helps bridge a glaring gap in existing literature and provides useful leads for further research.
Originality/value
To the authors’ knowledge, this is the first study to evaluate the existing practices employed to manage first-party fraud in e-retail.