The Rise of ‘Friendly Fraud’: How Everyday Customers Are Exploiting Loopholes in Delivery Systems

In today’s fast-paced world, online shopping has become a mainstay, providing customers with unmatched convenience, especially in busy seasons and around the Christmas period. However, this convenience has opened up a new challenge for retailers and couriers: an alarming increase in “friendly fraud.” Unlike typical fraud committed by cybercriminals or organised networks, friendly fraud is carried out by otherwise law-abiding customers who exploit loopholes in delivery systems to obtain refunds or replacements for products they claim to have never received.

What Is Friendly Fraud?

Friendly fraud happens when a customer—who has genuinely made a purchase—claims that a product did not arrive when, in fact, it did. This tactic is especially easy when deliveries are left at doorsteps or in “safe places” without requiring a signature, making it nearly impossible for retailers to verify receipt. With packages frequently left unattended, many customers realise they can simply state the parcel never arrived and receive a replacement or a refund.

Why is Friendly Fraud on the Rise?

The increase in friendly fraud is influenced by several factors, including overburdened couriers, high demand, and economic pressures.

1. High Volume of Deliveries: Couriers often face overwhelming demand, especially during peak times like Black Friday and the Christmas period. With the pressure to deliver faster, many couriers leave packages in accessible locations and skip obtaining a customer signature.

2. Cost-of-Living Crisis: As costs continue to rise, some individuals feel financial strain and may resort to friendly fraud as an opportunity to save money or acquire items at no cost.

3. Increased Online Shopping: With the convenience and popularity of online shopping, the opportunity to claim lost items has grown. The sheer volume of parcels being delivered makes tracking and confirming each item even more challenging.

How Retailers and Carriers Can Fight Friendly Fraud

As friendly fraud continues to grow, retailers and couriers are looking for ways to minimise their risk and ensure genuine deliveries are tracked more accurately. Here are a few key strategies that can help combat this issue.

1. Leverage Parcel Lockers

Parcel lockers are becoming a popular option, providing secure locations for customers to collect their orders. These lockers keep a digital record of every parcel dropped off by drivers and later picked up by customers. By ensuring that both the delivery and collection are recorded, retailers and couriers can confidently handle claims and refute false reports.

2. Implement Enhanced Tracking Solutions

Tracking technology that provides details like GPS coordinates, photos of delivery locations, or specific timestamps can improve delivery accuracy and protect retailers. For example, photos showing a package left at a specific spot on a customer’s property can serve as valuable evidence in the event of a dispute.

3. Encourage Signature and ID Verification for High-Value Items

For high-value items, it’s often worth requiring a signature or even ID verification upon delivery. While it might add a step to the delivery process, this verification method can discourage friendly fraud attempts, particularly for more expensive products like electronics, luxury items, and designer apparel.

4. Use Predictive Analytics to Identify Suspicious Patterns

Predictive analytics can help retailers detect patterns of potential fraud. For instance, if a customer has a history of claiming missing items, retailers may flag these patterns and take extra precautions with future orders. By monitoring buying behaviours and claims, retailers can respond proactively, preventing repeat offenders from taking advantage of their policies.

The Importance of a Proactive Approach

Friendly fraud might seem harmless, but it can have a significant impact on retailers’ bottom lines, affecting their profitability and even driving up prices for honest customers. Addressing friendly fraud requires a proactive approach, combining secure delivery methods, advanced tracking, and customer verification.

By leveraging these strategies, retailers and carriers can help reduce their vulnerability to opportunistic claims, preserve customer trust, and improve overall delivery security. Friendly fraud might be rising, but with the right tools and preventative measures, businesses can protect themselves and ensure that honest customers don’t end up bearing the costs of false claims.