Black Friday trends report: Increased credit application volumes put risk managers on high alert

by Carmel Maher

Carmel Maher

It’s that time of year again. Retail stores are advertising their Black Friday specials with many starting their sales even earlier, prompting some to refer to this popular shopping frenzy to grab deep discounts for holiday gifts as Black November.

A survey of U.S. consumers by BlackFriday.com shows that while Black Friday 2018 will continue be the biggest holiday shopping day of the season, only 15 percent of consumers will get up early to stand in line to take advantage of sales, 17 percent will shop later in the day to wait for the crowds to die down and a full 68 percent say they will do their shopping online.¹

What does this increase in shoppers mean for credit application volumes and fraud risk management strategies?

ID Analytics tracks trends in credit application volumes in our network year over year during the Black Friday shopping weekend. Last year we reported a nearly 30% increase in credit, loan and service application volumes from the bank card, retail card, wireless and online lending industries from October 2017 to November 2017.² Credit applications peaked early in the day and online applications were on the rise. On Cyber Monday 2017, one of ID Analytics’ customers saw a 51% increase in the number of online retail credit applications overall and a whopping 134% increase in online applicants when compared to Black Friday.³

Unfortunately, higher volumes of credit applications can mean the possibility of an increase in fraudulent applications. In 2017, ID Analytics examined levels of fraud risk on Black Friday across channels and discovered that retailers saw potential increased fraud risk particularly through the online channel; the percentage of risky applicants was two times higher online than in-store.⁴

What will ID Analytics’ Black Friday and Cyber Monday statistics reveal this year? What time will credit applications peak and where will fraudsters target their attacks? We will be tracking application volumes and reporting on these trends as they unfold in 2018.

For more information about how these spikes in credit application volumes can impact your fraud risk management strategies read our 2017 blog series, Black Friday 2017: Credit Applications Peak Early and Cyber Monday Hits Record Online Application Volumes: What this Means for Fraud Risk Managers.

 

Carmel Maher is the Product Marketing Manager for ID Analytics

 

1. BlackFriday.com, https://blackfriday.com/news/survey-black-friday-vs-cyber-monday (accessed November 9, 2018).

2. ID Analytics’ 2017 Black Friday weekend credit, loan and service application data analysis.

3. Ibid.

4. Ibid.