When the package arrives, the recipient has to sign for it – this is what the delivery process used to be. At present, the coronavirus makes it essential that parcel carriers and consumers have minimal contact. As a result, the signature of the recipient is usually no longer required when a package is handed over. This is a good way of protecting the health of both parties. However, it also has a high potential for fraud. The reason: Since the confirmation of receipt has been suspended and there is no verification of personal data, the scope for delivery fraud has increased.
Shipping risk lies with the online merchant.
There are two types of delivery fraud: the first is identity theft. In this case, a fraudster attempts to obtain personal user data via channels such as malware, fake websites, e-mails or short messages. He uses these to purchase goods on invoice and have them sent to a different delivery address with no intention of paying for the items. The second case is so-called Friendly Fraud. Here, the customer himself does not intend to pay for ordered goods and claims that they never arrived. Not requiring a signature makes both ways easier. Therefore, the legitimate question arises: in the current situation, who is liable in the case of delivery fraud? Generally, it is always the online merchants who carry the delivery risk vis-à-vis their customers. After all, it can happen that packages get lost on their way to the customer – be it due to incorrect address details, delivery errors or theft.
Often merchants are stuck with the costs
Currently, it is more difficult than ever to differentiate between delivery errors and fraud being the reason for the loss of goods. Unfortunately, liability is also not clearly defined, as the new contactless delivery procedure was decided at short notice to protect the health of the delivery staff, without e-commerce companies being involved in the decision. What is certain is that the consumer is not liable if they can credibly prove that they did not receive the goods. For example, they can prove that the delivery address differs from their place of residence by means of identification documents. As a last resort, he can make an affidavit. In turn, the deliverers can use force majeure as an argument for excluding liability. The circumstances of force majeure are regulated by DHL, for example, in its General Terms and Conditions in § 6 section 2.
Finally, the deliverers have introduced contactless delivery as a measure to contain the coronavirus in accordance with the decisions of the World Health Organization and the Government and to protect customers and employees. For online retailers, it is difficult to prove in a possible civil lawsuit that a package really has arrived. Therefore, if both the deliverer and the consumer can exonerate themselves, the merchant is usually left to bear the costs. And the full extent of them too: from the value of the goods, packaging costs, postage, storage costs, expenses for tracking and the expenses for manual order reviews.
Identify and avoid weak points
At the moment, protecting yourself against fraud as a merchant is challenging because it is a completely new situation and therefore no references are available. I have heard from some e-commerce companies that deliverers and companies are currently sharing the costs… I personally think that this is an appropriate solution, because we are in an entirely new situation. Some of the suppliers are currently trying to make the process more secure by letting the recipient sign with their own pen on the consignment label and then photographing it. Nevertheless, online retailers should not rely on the goodwill of the deliverers, as in some cases the signature is still not required, and this can lead to a loss of revenue for retailers. Consequently, merchants should place more focus than ever on fraud prevention. A clear recommendation on how to handle the individual situation is not possible. It is therefore crucial to get a holistic view of the potential weak points in fraud prevention.
We carry out this kind of analysis together with online merchants in our Fraud Prevention Workshops, which we are currently running for free. In these workshops, we uncover your specific fraud phenomena and the possible points of attack in your processes, and explain the latest techniques used by fraudsters. To register for the 15 free Fraud Prevention Workshops, click here. It is important for online merchants to check all the settings in order to have the best possible protection against fraud – during and after the coronavirus crisis.