The Pandemic Effect on Purchase Patterns

The Pandemic Effect on Purchase Patterns

The Pandemic is having a significant impact on merchants. Those with brick and mortar storefronts have been forced to pivot operations in unexpected ways or face closure. Many are unable to effectively accommodate changing in-person restrictions and have shifted sales online. And this is new territory for them – even for those with an existing online presence, as they’re faced with equally shifting purchase patterns that flag purchases as fraudulent.A white printed sign in a storefront window that says "Attention: Due to COVID-19 our store is closed to the public. However, phone orders with curbside pickups available"

Accommodating Changing Purchase Patterns

Merchants are noticing an uptick in sales. People are at home bored. Even those that are working are seeking distraction. The one commonality in everyone’s experience these days is this: They’re trying to find some comfort and the best thing to do is buy online. 

This means you have many potential new clients, while your regulars are of course coming back for more. Are you ready for this kind of volume? What should you be doing to accommodate the current state of the world into your business strategy? Because here’s the problem: Even with an uptick in sales, you can be sure lots of purchases are not getting through, as they’re mistakenly flagged as fraud. 

Lots of people who haven't really ventured into online buying are doing so now. You may see an increase in failed authorizations, restricted cards being used, banks failing payments on customers who haven't done any online shopping ever, purchases on dodgy sites, insufficient funds, and lots more. And it can be a lot to manage.

Purchases outside of the “norm” are typically flagged as fraud, of course. And merchants know, expect and, under regular circumstances, appreciate this safety measure. But as society faces this “new normal” in response to COVID-19, purchase patterns are anything but typical. And for merchants who are now relying on these “new normal” (read: not normal at all) purchases to survive, having them rejected as fraudulent transactions is troublesome, at the least. And inevitably spelling doom for a good number of them, as the worse.

These changes – this shift to making purchases primarily via online - are set to continue for a good bit of time, after all. And merchants need to accommodate these changing purchase patterns – and fast. Or they’ll permanently lose lots of business to competitors. But, it’s not as easy as it sounds. Let’s consider how it looks to understand the complexities.


Spending Habit Changes are Unpredictable 

Image of a woman running along a concrete path next to a body of waterI’ve noticed there are so many runners on my street now. My street didn't have any of those before. Being in isolation makes you do crazy things, I guess. In the meantime, my "new life goal runner/previously sedentary" neighbor had to buy the whole get up to go running, of course. They likely needed running shoes and headphones. They definitely needed a phone holder strap for their arm and a little fanny pack to carry their keys. And maybe they purchased a fitbit as well. Or an app to track their exercise and such?

And there are LOTS of people doing the same. Exercise equipment was sold out on many sites for months!

And then there are folks buying things they would have normally bought at Costco, or maybe never bought before at all. These differing purchase patterns, with everything up for grabs online and some panic or purpose buying – it all makes it challenging to accurately detect fraud. This is true, in part, because it’s all happening very rapidly.

Merchants are noticing people checking out several times as they forget one thing, or decide they want to buy more of something. And it’s not just new runners and folks buying groceries, but also those in a flurry of “wanting to support local shops” as well. And they’re buying things one wouldn’t expect, capturing great deals on cars, furniture and other things they may have been holding off on purchasing. There’s nothing like a pandemic that threatens existence to increase that need for more stuff, apparently. And for not waiting for a day that may never come.

And these changes can appear as wild fluctuations, which will certainly affect merchants’ conversions. It also affects consumers, as unpredictable habits – and legitimate spending flagged as such – can result in their cards having unwarranted restrictions placed on them. And that’s a hiccup in spending that no one wants!

So, what can merchants do?


Revamping Fraud Detection Controls While Avoiding Risk

While not wanting to expose consumers to unnecessary risk, which can certainly happen if a merchant loosens its fraud detection controls, rethinking data structures and defining new protocols to detect fraud is a must. As it’s not only consumers facing risk here, merchants are as well.

Understanding pivoting purchase trends helps, assuming your business has a team devoted to monitoring trends. And if you do not, retaining a service that can help is something to seriously consider. Because, either way, it’s important to not get this wrong. For every valid, out-of-place purchase out there, a corresponding bad actor is lying in wait.

The fraudsters are out in force, as they know this is a tenuous time for merchants seeking to accommodate a quickly evolving market. 


While more and more people are using the interwebs to buy their cotton swabs, more cards are exposed. There's been a huge spike in phishing emails, phone calls, clickbait, etc. And increased sales volume is perfect to mask the activity of some organized groups. Make no mistake – fraudsters are organized. 

Our recommendations? 

  1. Perform a Rule Audit in the coming weeks, at the least. It can be exhausting, but it's important to be ready for what's to come. Any changes you make now will stick for a while.
  2. Develop some kind of messaging to educate customers on why their orders are getting rejected will be important, as will come up with solid instructions around how to help them complete their transactions. 
  3. With more cards and data out in the market, we can expect a change in the structure of the activity from different fraud rings, and we’re watching for these changes closely. Be sure you have a team performing similar checks, as it shifts as quickly as consumer spending habits! It’s never been more important than it is right now to be agile and ready to adapt. And this is likely merchants' “new normal” for the foreseeable future.


We can help you Reach these consumers with enhanced, adaptive protocols that will accommodate this new normal and whatever comes next. Connect for more info!


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