It’s bracket season! Do you know who’s making big bets on the basketball tournament?

Popular brands like Under Armour and Nike are banking on strong sales of recent releases like the Curry 12 ‘Spark’ colorway (to honor Steph’s famous championship run with Davidson University) and the classic Air Jordan 1 Low in UNC Tar Heel blue.

New releases and special editions are huge events in the sneakerverse, with hypebeasts and mainstream consumers alike obsessively tracking release dates and availability, waiting miles in line for big drops, and paying premium prices for limited-edition styles and colorways. Unfortunately, new releases can also be big paydays for the fraudsters who profit from the sneaker resale market.

Running rampant: Omnichannel sneaker fraud

The prospect of snagging limited-edition footwear recently sparked an old-timey crime spree across the American West. In a string of at least ten train heists since March of last year, criminals made off with nearly $2 million in coveted kicks, including thousands of pairs in unreleased styles.

Less daring but just as disruptive for stockists, unruly crowds and unwelcome resellers occasionally require law enforcement intervention as they reportedly did at the highly-anticipated BODE x Nike Astro Grabbers drop last spring. 

Online, big release dates can trigger big spikes in fraud. Analysis of Riskified transaction data shows that NBA All-Star weekend sneaker releases create a peak for fraud, with fraud attempts rising +41% compared to the annual average.

Limited edition abuse is especially challenging for online merchants because fraudsters can use bots and account takeovers (ATOs) to make large-scale illicit purchases.

Returning fake sneaker replicas has also become a common scheme, forcing merchants to deploy time-intensive verifications to confirm product authenticity.

Whether the theft is online, in-store, or in transit, criminals who resell sneakers at inflated prices deprive legitimate customers of the goods they want, take profits out of stockists’ pockets, and damage the brands’ reputations.

Unfortunately, the problem isn’t going anywhere. The sneaker market is growing and diversifying, with a wider array of brands now considered fashion instead of just footwear. Fraudsters are becoming more sophisticated, too, and they have unprecedented access to online resources and guides for monetizing stolen sneakers or flipping counterfeits.

For proven plays against sneaker fraud, read the latest Risk Rundown

With its thriving and lucrative resale market, the sneakers industry is consistently the riskiest subset of fashion ecommerce in terms of fraud. Sneaker fraud erodes merchant profitability, brand reputation, and customer trust, and it puts a damper on key sales opportunities like March Madness.

For a look at the best defensive strategies, read our latest Risk Rundown on the sneaker market. Inside you’ll get an in-depth analysis of sneaker orders processed through our vast merchant network; exclusive category-specific research and intelligence from online fraud forums; and proven strategies to help you preserve profits and customer experiences.