Online Retail Fraud Continues to Rise, Prompting Ecommerce Sellers to Strengthen Fraud Prevention

While physical shoplifting appears to be stabilizing in many retail environments, online fraud continues to create growing challenges for ecommerce businesses. According to a Retail Dive article, retailers are increasingly reporting issues such as gift card fraud and other forms of digital fraud, highlighting how criminal activity is shifting alongside consumer shopping habits.

Recent industry research suggests these challenges extend well beyond gift cards. The Merchant Risk Council’s 2025 Global eCommerce Payments & Fraud Report found that 57% of merchants reported an increase in refund and policy abuse over the previous year, while 47% identified refund abuse as the most common fraud attack they face.

Signifyd’s 2025 State of Fraud and Returns report also found fraud pressure increased by value during 2025, while abusive returns rose significantly, creating additional financial and operational pressure for online retailers.

For ecommerce sellers, the impact goes beyond lost merchandise. Fraud can increase chargebacks, raise operational costs, delay legitimate orders, and consume valuable staff time investigating suspicious transactions. Businesses must also balance stronger fraud controls with a seamless customer experience to avoid creating unnecessary friction for legitimate buyers.

To reduce risk, ecommerce sellers should regularly review fraud prevention rules, strengthen order verification for higher-risk purchases, and monitor returns for patterns of abuse. Integrating order management, inventory, and returns processes into a single system can also improve visibility, helping businesses identify suspicious activity earlier while processing legitimate orders more efficiently.

Book a Descartes demo to discover how our ecommerce solutions can help you improve order visibility, strengthen fraud prevention, and streamline returns management.