Sneakers: The riskiest apparel to sell online

London - It cannot be denied that 2016 was the year of the sneaker. Last year saw women in the UK splash out more cash than ever for the perfect pair of comfortable kicks, as the sales of trainers surpassed those of high heels for the first time, according retail analyst firm Mintel. From the front row of London Fashion Week, to the head offices of Vogue and the swankiest cocktail bars in New York, sneakers have never been in such demand.

With the global athletic footwear market predicted to be worth a staggering 83.2 billion dollars this year, retailers around the world are rushing to stock up on the latest it-footwear styles. However, although things may be looking very rosy for sneaker leaders such as Nike, adidas and Under Armour, the rise of the sneaker has brought along a unique set of fraud challenges for online retailers. Sneakers have been highlighted as the riskiest apparel to sell online, with 300 percent more fraud attempts made against sneaker than any other fashion products according to a report from Riskified, fraud solutions provider.

Sneakers named the most fraudulent fashion item online

In fact, sneakers carry 3 times the risk compared to any other fashion purchase, as the resale market for sneakers has increased tenfold over the past decade according to the findings in the report entitled: 'CNP Fraud in Online Sneaker Sales'. In addition the high collectible value of sneakers has made them the most wanted fashion item for internet fraudsters. Although the majority of footwear retailers are aware of the high levels of fraud, many prevention systems fail to detect fraud effectively. Automated rules-based systems often decline orders to certain countries or reshippers, which leads to high false decline rates. However as the sneaker hype continues to expand across the globe, more and more 'sneakerheads' are prepared to excesses shipping fees for the right pair of sneakers. But an automated system could led to an increased number of 'false negatives' and discourage international shoppers and ledd to a high percentage of shopping cart abandonment.

On the other hand an unoptimized rules system usually sees online retailers spending too much time reviewing orders manually and asking shoppers to prove their identity. This in turn can lead to excess friction, which can spoil the online shopping experience and also lead to an increased number of abandoned shopping baskets. Although approving fraudulent orders can cause costly chargebacks, which eventually erode online retailers revenue, 4 out of 5 sneaker orders are still legitimate. On average, footwear retailers can safely approve at least 80 percent of online orders, notes Riskified. Approval rates under 80 percent tend to indicate that genuine customers were being turned away.

Therefore, in order to properly tackle fraud head on, sneaker retailers should know where their fraud is. We share the top tips for trainer retailers to keep in mind when looking for fraudsters.

#1 Fraudsters go for the most-wanted, trendy sneakers

Although most retailers would think that fraudsters tend to go for the high-ticketed, luxury items, when it comes to fraud in the sneaker world it does not always revolve around the price-tag. For example, a trendy pair of sneakers, such as the Vans Old Skool or adidas Superstar, will be much easier to resell on a second market because the are in 'fashion' now, making it easy for fraudster to make a fast buck. Online retailer are advised to pay closer attention to how popular a certain brand or model of sneaker is in order to catch more fraudsters, rather than price.

#2 More sneakers is not always a good thing

The higher the number of sneakers in an online order, the higher risk there is of fraud, according to data from Riskified. An order with 6 or more sneakers was found to be 3.5 times are risky as an order containing a single pair of sneakers. Fraudsters who intend to resell the sneakers on usually are not concerned with how much they spend, as they are not spending their own money, but just keen to get their hands on as many pairs of sneakers as they can. This is particularly interesting, as it acts in contrast to the general rule of thumb, which sees single-item shopping carts at a higher risk of fraud.

#3 Male sneakers more in demand

Orders for men's sneakers were found to carry a 55 percent higher rate of fraud than orders for women's sneakers. In addition, boy's sneaker orders are also 8 percent more likely to be fraudulent than girls'. This correlation can be attributed to the fact that there is a much larger resale market for men's sneakers than women's sneakers, so if a fraudster aims to resell the shoes, they are more likely to go for men's styles.

#4 Fraudsters shy away from in-store pickup

As shopping habits evolve more and more retailers offer the option to place an order online to pick up in store. However, data indicates that although selecting an in-store pick up means fraudsters do not have to leave a home address, making it seemingly easier to commit fraud, online orders scheduled for an in-store pick up carry a third of the risk compared to regular online orders. If retailers are able to match the in-store pickup order, to a email address or phone number, the risk of it being fraudulent drops to a quarter.

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