Generation Z is so frustrated with the economy that they think cheating is normal

In Q4 2023, 42% Generation Z admitted to engaging in first-party fraud, where they dispute a purchase with their payment provider even though it was legitimate. This is significantly higher than any other generation—the second highest generation is millennials, with just 22% admitting to engaging in first-party fraud. This squareWe found that 33% of Gen Z respondents know someone who has engaged in payment fraud or have done so themselves. Again, this percentage is much higher than other generations.

This data may seem sensational, but if we look deeper, it makes a lot of sense. Academic There is a theory called the “fraud triangle,” which suggests that people are more likely to cheat if they have motive, reason, and opportunity.

Gen Z is facing persistent and diverse financial challenges

Generation Z has a number of unfortunate economic factors that make them feel anxious. A word survey Intuition found that 73% of Zoomers feel that the current economic climate makes it harder to save money. They are struggling with Housing costs increase, student loan debtAnd price increase in everyday purchases like groceries, at the same time wages have stagnated for workers at many income levels.

These factors create a financially stressful situation that makes it harder to pay for everyday necessities. It’s no surprise that economic anxiety can drive people to look for strategies to save every dollar. For most people, the behavior is harmless: clipping coupons, switching from brand to bargain, or buying secondhand. In fact, Generation Z is also the generation most likely to shop for secondhand goods online, with 42% of this generation Purchased a resale item within the past year.

But when faced with unsuitable circumstances, some people will turn to stolen payment methods or claims to get more for less. In these situations, consumers may rationalize fraudulent behavior by convincing themselves that their actions are necessary or reasonable in the economic context. They may view their actions as a temporary solution or even a moral gray area with few consequences for anyone.

They approach brand loyalty differently.

Generation Z may see large corporations as the cause of these broader economic challenges, making them less likely to view their theft as immoral. They may view this behavior as a victimless crime, since the companies they deal with are often industry giants.

They are also less loyal to legacy brands than previous generations. Name recognition alone is not enough to compel Gen Zers to make a purchase. They are increasingly looking for “scams” ​​as a way to save money, Prioritize cheaper goods and services across luxury brands. This includes all types of purchases, from clothing and accessories to beauty and personal care products. They are also more willing Try new brands and less influenced by established names and celebrity endorsements.

This mentality extends beyond the businesses they buy from. Generation Z also prioritizes flexibility in spending and draw Monthly subscription or shared service allows access without commitment to ownership, from car-share ARRIVE video streaming to register the product.

With the desire for unlimited access to goods and services, there’s a natural incentive to maintain that access, which can lead shoppers to turn to nefarious means to do so. The logic is that a company would most likely find out if you stole a car or a TV—but the risk is much less with a $6.99 monthly subscription.

They are digital natives

Gen Z is more heavily influenced by social media and spending more time online more than any other generation, allowing online trends to dictate What do they buy? and how they get their news.

Their time spent on social media also makes them more vulnerable to scams. Going back to iconic online attractors like Anna Delvey and Fyre Fest, there’s a newer category of influencers that are promoting more blatant fraud, sells step-by-step instructions detailing how to hack into accounts or make purchases using stolen payment methods. Screening data shows that 34% of Generation Z have seen offers to participate in online scams, compared to just 9% of baby boomers. Exposure to social media content is another key reason Gen Z is more likely to commit fraud — and highlights the profound influence social media has on consumer behavior.

This generation’s unique challenges and perspectives create a need for a nuanced approach from businesses, one that addresses their economic concerns, adapting to their consumer habits. their users and interact with them even when they are online.

Some proven approaches include:

• Emphasize authenticity and social responsibility. This helps consumers feel a deeper emotional connection with the brand and prevents them from viewing it as a faceless entity.
• Offer discounts and flexible payment methods like BNPL (buy now, pay later), so consumers can save and spend at the same time.
• Promote flexibilitythrough services like low-cost monthly subscriptions.
• Provide a clear return policy to reduce return fraud and give shoppers more peace of mind.
• Prioritize responsive customer service and quickly offer refunds or alternatives so shoppers don’t turn to chargebacks to resolve any issues.

Gen Z’s willingness to engage in online fraud reflects a complex interplay of economic pressures, changing consumer behavior, and the influence of social media. This trend, while having a real impact on business, is driven by financial stress, a desire for affordability and a different approach to loyalty and spending. brand usage.

It is essential to view these findings and recommendations not as an indictment of a generation but as a window into a group. increase its purchasing powereven in the face of more economic barriers.

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