Retail ID fraud has risen 22.7 percent since December 2024, threatening even the most resilient retail brands, according to risk data processed via ID verifications throughout all of IDScan.net’s retail customers. The threat of ID fraud is ever present, always probing defenses for vulnerabilities, evolving via fraudsters’ continuous enhancements to fake identities. The prevalence of ID fraud attempts means that to protect revenue, reduce shrinkage, and safeguard valuable customers, it is no longer an option for retailers to ignore the anti-fraud solutions available to them.
Types of retail ID fraud
Retailers are facing growing threats from fake and synthetic IDs, leading to chargebacks, fines, and stolen goods. As fraud methods diversify and become more sophisticated, unprepared businesses are left vulnerable. Specifically, return fraud and fake identities carry the most considerable risk, both from financial and reputational standpoints.
Return fraud comes in many shapes and sizes, with the ultimate aim of receiving an item or service without paying for it, or the cash it was worth. An individual committing return fraud usually seeks goods for themselves or acquaintances, however, for highly organized criminal gangs, return fraud is used to fence items. Successfully stopping return fraud brings consistency to revenue, reduces shrinkage, and creates a more consistent, satisfying experience for legitimate customers.
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