How to Fight the Main Retail Fraud Schemes

Fraud schemes represent significant challenges for ecommerce businesses, which is why it's important to understand the main threats and how to mitigate them. Retail companies and ecommerce businesses face ongoing fraud challenges that can lead to significant losses, high mitigation costs, and damage to brand reputation.

In this article, we'll explore the main types of ecommerce fraud, highlighting their financial and reputational impacts, as well as discussing detection strategies and Threat Intelligence solutions to identify suspicious activities. Let’s get started!

The Three Main Types of Ecommerce Fraud Schemes

Ecommerce fraud schemes represent real threats to businesses of all sizes. With fraud tactics becoming more sophisticated, companies must stay ahead by implementing strong fraud prevention tools like multifactor authentication, automated detection systems, and threat monitoring platforms.

Here are the three most common types of ecommerce fraud — and why they matter:

Payment Fraud

This type of fraud is one of the most damaging for online retailers. Scammers use stolen or synthetic identities, cloned credit cards, or compromised third-party payment credentials to make unauthorized purchases.

In many cases, fraudsters also manipulate refund systems. They may claim a product never arrived or file chargebacks with the card issuer after receiving the goods — forcing the retailer to refund both the merchandise and the money, often without recourse.

Account Fraud

Account fraud, or account takeover (ATO), is increasingly common as scammers gain access to legitimate customer accounts. These attacks often begin with phishing emails, credential stuffing, or social engineering techniques. Once inside, attackers can change billing or shipping information, initiate unauthorized transactions, or extract personal data for further exploitation.

This type of fraud is especially damaging because it erodes customer trust — shoppers assume the business failed to protect their accounts, even when the breach originated elsewhere.

Delivery Fraud

Delivery fraud targets the final stage of the ecommerce transaction: fulfillment. In this scheme, fraudsters provide false delivery addresses, intercept packages, or claim that orders were never received. Some even return used or low-value items in place of what was shipped, exploiting lenient return policies to avoid detection.

This form of fraud not only results in lost merchandise and revenue but also increases strain on customer service teams and negatively affects operational costs.

Financial and Brand Reputation Impacts

Fraud is more than a technical issue — it's a business risk that affects the bottom line and how customers perceive your brand. Below are the most common impacts:

Direct Financial Losses

Ecommerce fraud leads to immediate financial hits. These include stolen goods, costs of chargebacks and fraudulent refunds, time and money spent on investigations, and the additional expense of strengthening systems to prevent further attacks.

Costs Related to Fraud Prevention and Mitigation

Once a business is targeted, the response usually involves heavier investments in fraud detection tools, forensic investigations, cybersecurity personnel and internal training. These costs can add up quickly — even for businesses that are already fraud-aware.

Impact on Earnings and Profitability

Fraud impacts more than just individual transactions. It affects long-term revenue by driving away legitimate customers who lose faith in a retailer’s ability to keep their information and orders safe. Fewer sales, more churn and reduced customer lifetime value are common outcomes.

Damage to Brand Reputation

A single incident of fraud can have ripple effects. If customers or the media publicize a security lapse, the perception of the brand as safe and trustworthy takes a major hit. Recovering from reputational damage is slow and expensive — and often impacts customer retention, partnerships and investor confidence.

Legal and Regulatory Impact

In some cases, fraud leads to regulatory consequences. Depending on the jurisdiction, businesses may be held accountable for failing to protect customer data. Legal exposure can include consumer lawsuits, fines and compliance violations, particularly under regulations such as GDPR, CCPA or PCI-DSS.

Protection Measures to Monitor and Reduce Fraud Risk

To avoid these consequences, ecommerce businesses must take a proactive approach to fraud prevention — and that begins with strategic threat detection.

Cyber Threat Intelligence: Real-Time Risk Visibility

ClearSale’s Cyber Threat Intelligence (CTI) platform helps ecommerce businesses detect and act on emerging threats long before they show up in transaction data. By continuously monitoring open-source intelligence channels — including dark web forums, encrypted messaging apps, and online marketplaces — the platform identifies fraud trends in real time.

Key CTI features include:

• Credential leak detection: Identifies when login credentials are circulating in breach data or stealer logs.
• Phishing site alerts: Detects fake websites or brand impersonation attempts that trick customers into revealing personal data.
• Malware exposure alerts: Flags if your customers or internal team have been affected by malware targeting ecommerce platforms.
• Fraud ring analysis: Maps behavior patterns to uncover coordinated attack groups and understand how fraudsters are exploiting your business model.

Combined with expert-led investigations, ClearSale’s CTI enables businesses to patch vulnerabilities, strengthen fraud rules, and get ahead of threats — rather than react to them after losses have occurred.

Brand Protection: Preserving Trust and Eliminating Impersonators

ClearSale’s Brand Protection solution works in tandem with CTI to safeguard your company’s identity across digital channels.

The platform scans the surface web, social media, online ads and marketplaces for unauthorized use of your brand name, logo or product images. When it detects impersonation — such as fake stores, phishing pages or counterfeit listings — it takes fast action to request takedown, often without requiring your direct involvement.

Key benefits include:

• Reduced customer confusion: Clear fake listings and profiles that may trick customers into purchasing from illegitimate sources.
• Preserved brand credibility: Maintain control over your brand image, and eliminate threats that undermine customer confidence.
• Legal risk mitigation: Take swift action to minimize potential liability tied to third-party fraud impersonating your brand.

When combined, ClearSale’s Brand Protection and CTI platforms provide a powerful one-two punch: one monitors and eliminates external threats, while the other uncovers the deeper fraud strategies behind them.

Move From Reactive Defense to Proactive Fraud Prevention

Ecommerce fraud is no longer limited to stolen credit cards. Today’s threats are diverse, dynamic and well-organized — and they require more than traditional fraud filters.

With ClearSale’s Cyber Threat Intelligence and Brand Protection platforms, your business can detect risks early, respond faster, and stop fraud before it impacts your operations or customers.

Whether you’re battling chargebacks, account takeovers, or brand impersonation, the best defense is a clear view of the threats coming your way — and the power to stop them.

Learn more about how ClearSale’s Cyber Threat Intelligence solution can help protect your ecommerce business from evolving fraud schemes.