Buy Online, Steal In-Store: How Retailers Can Prevent BOPIS Fraud

Bolt Team


Jennifer Lee

Product Marketing Manager, Bolt

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Shopping bags placed in car trunk (BOPIS)

For years, retailers have heard about the supposed demise of brick and mortar at the hands of Ecommerce. The storefronts that they poured time and resources into building would soon become showrooms for the likes of Amazon. 

While some of this may be true, Ecommerce has grabbed a growing share of total retail sales in the US, physical stores still serve a valuable purpose. In fact, many retailers are finding success by using their real-world stores as pickup locations for purchases made online—a strategy known as “buy online, pick up in-store” (BOPIS).

Learn How Fraud Can Change Shoppers’ Opinion of Retailers

The trend towards BOPIS hasn’t come without risk, though. Bad actors have followed the popularity of this omnichannel approach as another way to exploit retailers for their own personal gain. 

Here’s what retailers need to know about BOPIS and how to combat BOPIS fraud. 

Why Retailers Can’t Ignore BOPIS

Retailers may be asking themselves, “Why would I willingly offer a service that’s a hotbed for fraud?” And they’re not wrong in having these concerns. A recent study found that 7% of all BOPIS transactions were suspected of fraud, well above the 4.6% attempted fraud rate in other channels. Doesn’t sound great, right?

But the other side of the same coin tells a far more optimistic story, one in which retailers actually see sales grow when they offer a BOPIS option. Insider Intelligence estimates that the hybrid approach accounted for nearly 10% of all Ecommerce sales in 2020, more than double what it had generated in 2019. 

A large part of its success was because of shoppers’ desire to stay socially distanced during the thick of the pandemic. But experts maintain that BOPIS will not be a flash in the pan. 

By 2024, some estimates suggest BOPIS sales will hit $140 billion or about 17% of all Ecommerce sales. What’s driving this optimism is a mix of shoppers’ enthusiasm for the channel and merchants’ rapid adoption of it. 

The Draw of BOPIS

A 2021 survey found that 64% of shoppers have used BOPIS to make a purchase, with as many as 20% reporting to use the option frequently. The primary draw of the click and collect method is convenience. 

No one likes to wait for a package to arrive in the mail, especially when delivery times can drag on for multiple days or weeks. With buy online, pick up in-store, wait times are shortened to as little as a few hours. 

For example, shoppers can order a new big-screen TV in the morning and pick it up that afternoon without ever having to wait in line or step foot in a store. 

The other reasons shoppers gravitate to BOPIS are:

  • Seeing the product before taking it home
  • Avoiding unnecessary shipping costs
  • Instantly returning a product  

For retailers, the appeal of BOPIS comes down to two factors: giving shoppers what they want and increasing sales. In cases when shoppers pick up in-store and not curbside, it offers retailers an additional chance to upsell customers on services or accessories. One study found that 85% of shoppers make additional in-store purchases when they pick up items purchased online. 

How Fraudsters Exploit BOPIS 

The ability to satisfy customers and increase sales sounds like a win-win for any retailer, but the high prevalence of fraud in BOPIS may have some second-guessing whether to implement the click and collect method. 

Unlike traditional online purchases, BOPIS purchases give bad actors multiple loopholes to buy online, pick up in-store and never pay. For one, shoppers typically don’t encounter advanced fraud detection algorithms when using the click and collect option. 

No one at the store verifies their billing or shipping address, often major red flags for fraud. The most scrutiny they may get is when a store associate verifies their identity, and in most cases, a fraudster will simply use a fake ID. 

The other thing fraudsters will exploit is the convenience of BOPIS. When shoppers pick up in-store, they expect their order to be ready within a few hours. On the backend, that process involves communication among the inventory management system, the real-world store, and the website. 

Even the slightest lapse in communication gives fraudsters enough time to act. For example, some bad actors will place an order online, cancel the order moments later, and pick up the original order before an in-store associate can be notified of the change. 

5 Ways to Combat BOPIS Fraud

As more companies embrace an omnichannel approach—one that includes online, in-store, and BOPIS channels, amongst more—there will be a greater need to take a tougher stance on security and fraud prevention.

1. Partner with a Robust Payment Processor

Using a dynamic payment processor can be retailers’ first line of defense against fraud, BOPIS or not. Bolt, in particular, offers retailers a full suite of tools to stamp out fraud, verify customers’ identity, and process payments, amongst more. 

That means retailers aren’t jumping from system to system to chase a trail of breadcrumbs that a fraudster may or may not leave behind. They have complete visibility into a customer’s potential illicit activity. 

2. Fraud Prevention Online, Not In-Person

It’s no longer enough to treat different channels as separate silos. Fraud online is just as much connected to fraud in-store and vice versa. By starting the verification process at the first point of contact (online) rather than at the point of purchase (in-store), retailers can root out fraud more effectively. 

That means retailers should use the same fraud detection algorithms to screen a BOPIS shopper as they would a traditional online shopper. In other words, fraudsters will never get to the “pick up in-store” part of BOPIS without being screened online. And there’s no better way to do that than with Bolt. 

Bolt employs 200 real-time behavioral signals and supervised machine learning to assess a shopper’s fraud risk. The platform also cross-checks shipping and billing addresses to ensure a shopper is who they claim. 

3. Take a Holistic Approach to Fraud

Fraud can often feel like an isolated incident; a fraudster steals from a retailer and never returns to the scene of the crime. But what’s really happening is that the same bad actor is using the same trick at many different retailers. 

One way retailers can get ahead of this situation is to ask nearby retailers if they’ve experienced the same fraud. But that seems time-consuming. The other way is to use Bolt. 

The Bolt Network currently supports thousands of merchants selling to tens of millions of shoppers. So if a transaction looks suspicious, there’s a good chance another retailer on the Bolt Network has seen and flagged the same customer. 

4. Real-Time Fraud Detection

Remember, the blessing and curse of BOPIS is convenience. Convenience allows shoppers to pick up orders within an hour of making a purchase. It also exposes retailers to higher incidences of fraud. Integrated systems like Bolt put an end to those tradeoffs. 

Bolt uses hundreds of real-time behavioral signals to detect suspicious patterns in shoppers’ behavior. And when our quantitative assessment is not enough, we have an expert team that reviews any order in question. 

5. Automated and Scalable Prevention

The ability to detect fraud at scale requires robust technology that can support retailers no matter how much GMV they’re processing. The good news is Bolt does just that. Retailers currently trust our platform to screen tens of millions of shoppers buying billions of dollars in goods services. In short, retailers will never outgrow Bolt.


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