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Hardware Retailing’s report describes how small retailers can face fraud across returns, payment cards, gift cards, online accounts and supplier communications. It recommends layered safeguards such as updated point-of-sale systems, multi-factor authentication, independent verification of unusual requests and regular transaction reviews.
Hardware Retailing has published guidance for small-business owners on common retail fraud schemes and ways to reduce exposure, including stronger point-of-sale controls, multi-factor authentication and clear checks for refunds and payment changes. The report focuses on independent retailers, which may sell valuable, easily resold goods while lacking dedicated fraud-prevention staff.
The report describes several routes criminals may use to take money or merchandise from retailers: fraudulent returns, fake receipts, counterfeit items returned for refunds, stolen payment cards, gift-card tampering and account takeovers. A compromised loyalty or online account can make a fraudulent purchase appear to come from a known customer, potentially weakening controls that rely on familiar account details.
It cites a projection that retailers would process $849.9 billion in merchandise returns in 2025, with 9% of returns classified as fraudulent. Those figures describe the retail industry overall, not losses at small businesses. The report also cites a Federal Reserve survey finding that 16% of U.S. adults reported experiencing credit card fraud. Retailers can face chargebacks or lost goods when fraudulent card transactions are reversed.
Among the recommended measures are keeping point-of-sale software updated, limiting administrative access and requiring manager approval for high-risk actions such as large refunds. The report also advises enabling multi-factor authentication on banking, email and other sensitive accounts; establishing written procedures for refunds and vendor-payment changes; and reviewing transaction and inventory records for repeated anomalies.
How Layered Controls Reduce Exposure
Small retailers can be affected even when they are not the direct target of a theft of personal information. A stolen card or compromised customer account may lead to chargebacks, merchandise losses or staff time spent resolving disputes. Gift-card fraud can also shift losses to a store if stolen card details are used to drain a balance after activation.
The report’s recommendations focus on reducing opportunities across different points in a business, rather than relying on one fraud filter. Access limits, approval rules and independent verification can make it harder for an attacker—or an employee abusing access—to complete a high-risk transaction unnoticed. Reviewing sales, refunds and inventory can help owners spot patterns that a single transaction might not reveal.
Clear procedures also matter when a request appears urgent. Employees who know how to verify a supplier’s payment change or escalate an unusual refund are less likely to be pressured into bypassing normal checks. The report presents these steps as practical safeguards, not a guarantee that fraud will be prevented.
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Retail Fraud Across Sales Channels
The report places its advice against the growth of online retail and the range of ways a retailer now handles payments and customer accounts. It says e-commerce represented 16.4% of total U.S. retail sales in 2025. That figure is a share of sales for that year; the supplied material does not provide a comparison baseline for calculating a change over time.
Some of the threats described are familiar retail problems, including stolen merchandise and disputed refunds. Others rely on digital access, such as stolen credentials, spoofed emails or tampered gift cards. The report argues that tactics can vary while warning signs often remain recognizable, making staff guidance and consistent checks relevant alongside technical security measures.
Its examples include business email compromise, or BEC, in which a criminal impersonates a trusted contact to redirect money or obtain sensitive information. The supplied excerpt begins an example involving a fake supplier invoice but ends before detailing all the scenarios, so further specifics cannot be confirmed from the available material.
““no business is immune to modern fraud threats.””
— Hardware Retailing report by Luke Vander Linden
What the Report Does Not Establish
The supplied report material does not quantify how much fraud small retailers lose, how often the recommended controls prevent an incident or which measures provide the greatest return for a particular store. The 2025 return estimate and adult credit-card survey figure are broad indicators, not measurements of fraud at independent hardware retailers.
The excerpt also does not include a complete list of the BEC scenarios it introduces, nor does it provide details such as a publication date or a named source for every statistic. The guidance is general; the specific risks and suitable controls will depend on a retailer’s systems, staffing and sales practices.
Steps Owners Can Put in Place
The report does not announce a new rule, product or scheduled policy change. Its next steps are operational: owners can review who has administrative access to payment systems, turn on multi-factor authentication for sensitive accounts and set approval requirements for large refunds and overrides.
Retailers can also document how staff should verify vendor banking changes and unusual payment requests, identify a clear person or channel for escalating concerns, and compare refund, chargeback and inventory records regularly. These practices may help businesses identify recurring patterns and adjust controls where needed; the source does not claim they eliminate fraud.
Key Questions
What fraud risks does the report identify for small retailers?
It lists fraudulent returns, stolen payment cards, gift-card tampering and account takeovers, as well as impersonation schemes involving supplier communications.
What does the report recommend for point-of-sale security?
Keep POS software updated, restrict administrative access and require manager approval for high-risk actions, including large refunds and overrides.
How can a retailer reduce the risk of account takeover?
The report recommends multi-factor authentication for banking, email and other accounts that can authorize payments or expose sensitive information.
What should employees do with unusual refund or vendor-payment requests?
Follow written procedures, verify requests through a trusted communication channel and escalate suspicious activity rather than making an exception under pressure.
Do the cited statistics measure fraud at small businesses?
No. The return estimate concerns the retail industry, and the credit-card figure concerns U.S. adults reporting personal experiences. The supplied material does not give a small-business-specific loss rate.
Source: hardwareretailing.com
