Key Indicators of Cyber Shoplifting


How Cyber Shoplifting Brings Retail Crime to the Digital Space

Let’s say someone walks into a store, pockets something off the shelf, then walks out without paying. That person would clearly be guilty of shoplifting…but did you know it’s possible to pull-off the same kind of behaviour online? The process is a little different, but cyber shoplifting is a very real problem.

Friendly Fraud vs. Cyber Shoplifting

Friendly fraudsters don’t really intend to hurt businesses. Most are good customers who end up filing a chargeback by mistake or out of desperation, but cyber shoplifters are an entirely different story. These thieves make purchases with the full intent to file a chargeback later.

There are many potential friendly fraud triggers. Here are just a few examples:

  • The purchase was made by a family member of the cardholder.
  • The cardholder can’t recognise the billing descriptor and suspects criminal fraud.
  • The cardholder doesn’t understand the difference between a return and a chargeback.
  • The cardholder wants to return an item beyond the allowed time limit.

Why Does Cyber Shoplifting Happen?

There are two main reasons why consumers engage in cyber shoplifting.

First, the buyer might attempt to purchase items in bulk to resell them, then demand a chargeback to recover the initial cost of the items. This behaviour is often associated with organised retail crime, or ORC. While traditionally an issue for brick-and-mortar stores, ORC is becoming more and more of a problem for eCommerce merchants, too.

Of course, cyber shoplifting isn’t always ORC, and that’s where our second possibility comes in: cyber shoplifting may be a simple, one-off incident perpetrated by a cardholder…at least at first.

Once a customer finds out how easy it is to request a chargeback—regardless of whether they’re entitled to it or not—there’s a lot of temptation to do it again. In fact, our data shows roughly 40% of all cardholders who file a successful chargeback will do so again within 60 days.

That’s right: the chargeback system is so broken, it can take legitimate customers and turn them into fraudsters.

The Key Indicators of Cyber Shoplifting

Employees in brick-and-mortar environments are trained to watch for certain “tells” to suggest a shopper is up to no good.

Avoiding eye contact, hanging out in corners or other concealed parts of the sales floor, and carrying a foil lined bag known as “booster bags” are all considered red flags for shoplifting. None of those behaviours transfer over from physical to digital space, of course, but there are still useful indicators that could help you identify cyber shoplifting before it’s too late.

Acquirers, make sure your merchants try to incorporate these practices to catch thieves in the act and reduce cyber shoplifting risk:


International orders are three times more likely to result in a fraudulent chargeback. It’s possible that ORC groups operating in other countries use chargebacks to acquire free merchandise and resell it for pure profit. Give international orders closer scrutiny; if they display the tell-tale signs of cross-border fraud, consider declining the transaction.


Be wary of new customers who submit an order for either a high-ticket item, or multiples of the same item. This could be a cyber shoplifter trying to acquire items to resell. We recommend flagging these transactions, then contact the customer and confirm the transaction before processing payment or shipping any goods.


Just like with other criminal fraud tactics, it’s not uncommon for cyber shoplifters to complete multiple transactions in quick succession, only to request a chargeback later. Watch for suspicious transaction velocity, and consider placing a limit on the number of transactions a customer can complete in a 24-hour period.


Sending a confirmation email is a must-do after every transaction. Not only could this help dissuade potential cyber shoplifting, it also keeps legitimate customers informed about their order status, making them less-likely to request a chargeback.


For some businesses, especially those with high-ticket merchandise, it makes sense to get active (rather than passive) order confirmation. Send the customer a confirmation email asking for an electronic signature before finalising the purchase. This would be a valuable piece of evidence if the customer files a dispute down the road.


Specify that any goods shipped will not be delivered without a signature from the customer. It will be hard for a cyber shoplifter to argue the transaction was not authorised if there is a signature with delivery confirmation showing that the item arrived at its intended destination.

Remember: no single “red flag” on its own indicates definite cyber shoplifting. However, if multiple different signs are identified, then it’s a good idea to act as necessary.

Of course, even if the merchant has been hyper-vigilant, there’s still a chance for cyber shoplifters to get through. When they do, respond fast.

Don’t Get Mad…Get Tactical

A tactical approach to representment describes a completely new strategy for submitting a second presentment.

Before, merchants relied on chargeback reason codes that were incapable of pinpointing the problem. In most cases, reason codes became a tool for cyber shoplifting and friendly fraud, disguising the real cause of the dispute. In contrast, a tactical chargeback response removes the reliance on reason codes; this strategy diagnoses chargeback triggers and identifies the right evidence to build a winning case.

Whether it’s cyber shoplifting, or just an honest mistake on the customer’s part, The Chargeback Company has the tools and expertise to make it possible to find the reason behind the reason code.

Our Tactical Chargeback Representment service is designed to evaluate disputes and craft an evidence-backed case. TCR clients enjoy:

  • Better dispute win rates
  • Faster resolutions
  • Fewer second chargebacks
  • Long-term chargeback reduction

Ready to make cyber shoplifting and other chargeback triggers a thing of the past? Click below and get started today.

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