Today’s digital commerce platforms have made it extraordinarily easy to launch, scale and sell globally. The built-in fraud protections that ship with those platforms work — and for many merchants at earlier stages, they work well enough.
But growth changes the equation. As transaction volumes climb, customer bases diversify and fraud tactics evolve, 62% of retail organizations still rely primarily on default platform protections. Among that group, nearly half report fraud losses growing faster than revenue.
This isn’t a failure of the platform. It’s a signal that the business has reached a point where specialized functionality is needed. The built-in tools were designed to help merchants get up and running quickly and reduce friction at checkout. They were never scoped to cover the full breadth of a sophisticated fraud operation.
The Gap Between Checkout and the Customer Journey
Merchants face enormous pressure to keep the buying experience seamless — and rightly so. But the most costly fraud types don’t originate at the point of payment. They begin much earlier: in account activity, login behavior and promotion usage.
Account takeover accounts for 26% of reported losses. Promotion and discount abuse accounts for 18%. These attacks exploit the customer lifecycle well upstream of checkout, in areas where transaction-level tools lack line of sight.
For merchants operating at scale, extending fraud detection to cover account creation, login patterns and promotional activity isn’t a nice-to-have. It’s where the exposure actually lives.
Why AI Adoption Is Driving Headcount Up, Not Down
Retail has moved decisively into AI-assisted fraud prevention — 97% of organizations surveyed now use AI in their fraud or AML workflows. But automation isn’t shrinking the fraud function. An identical 97% plan to increase fraud headcount this year, with nearly 60% expecting to add three or more full-time hires.
The reason is structural. Effective AI surfaces behavioral outliers and cross-channel patterns that manual reviews would never catch. Those signals generate investigations. Investigations demand judgment. And judgment requires people. The retailers extracting the most from their AI investment are treating it as a capability multiplier — not a headcount substitute.
What the 2026 Report Covers
The 2026 Retail Fraud Guide draws on responses from 330 global retail fraud and AML leaders. It explores how leading merchants are extending their fraud capabilities beyond default platform tools to match the complexity of their business.
Download the report to learn how to:
- Extend your detection upstream — shift fraud controls to account creation, login behavior and device intelligence so threats are neutralized before they reach checkout.
- Measure exposure, not just outcomes — move beyond chargeback rates to identify behavioral anomalies, promotion abuse patterns and account-level risk.
- Build AI as a long-term capability — connect machine learning models to a unified view of the customer lifecycle, not just transaction-level data.
- Align cross-functional teams — break down silos between eCommerce, payments and risk operations to execute a cohesive, lifecycle-wide defense.
