What: Retail payment fraud attack rates have declined, but chargebacks have surged as fraudsters shift to more targeted, sophisticated tactics like account takeover.

Why it is important: The changing fraud landscape demands that retailers recalibrate detection frameworks and prioritise longitudinal risk monitoring to sustain growth and protect brand reputation.

Recent fraud trend data reveals a paradox in retail security: while payment fraud attack rates and manual review volumes have dropped, chargeback rates have climbed sharply, rising 56% year over year. This shift reflects a move from high-volume, opportunistic attacks to more precise, high-value schemes such as account takeover and “good user gone bad” patterns, where fraudsters exploit trusted accounts and stored credentials for greater payoff. Automation and AI have improved operational efficiency, but speed-focused systems may miss these complex, delayed frauds, leading to increased losses and reputational risk. The impact is uneven across business models, with subscription and stored credential platforms facing heightened exposure. As over half of consumers say they would abandon a platform after experiencing fraud, the stakes for customer trust and lifetime value are higher than ever. To stay ahead, retailers must recalibrate their fraud detection frameworks, invest in longitudinal risk monitoring, and balance operational efficiency with robust, customer-centric prevention strategies.

IADS Notes: Recent IADS sources confirm that retail fraud is evolving rapidly, with a marked shift from high-volume, opportunistic attacks to more targeted, sophisticated schemes such as account takeover and “good user gone bad” patterns. The RH-ISAC Intelligence Trends Summary (Q4 2025) and the March 2026 CISO Benchmark Report both highlight the convergence of cybersecurity and fraud prevention as a defining challenge for the sector, with retailers investing in intelligence sharing, cross-functional collaboration, and integrated security strategies to protect customer trust and business continuity. Forrester’s 2026 payment industry predictions and BCG’s Global Payments Report (September 2025) underscore the rise of agentic AI and real-time payments, which, while improving efficiency, also introduce new fraud vectors and require robust, adaptive risk management. Journal du Net (January 2026) and The Robin Report (April 2026) document the surge in returns fraud and the operational and reputational costs of chargebacks, with leading retailers responding by tightening policies, leveraging AI for risk scoring, and personalizing fraud detection. RH-ISAC’s May 2025 analysis of account takeover incidents and the April 2025 Retail Bulletin report on cyberattacks at major retailers like M&S and Harrods further illustrate the sector’s vulnerability to credential theft and the need for layered defenses, proactive monitoring, and adaptive authentication. Collectively, these sources show that the most resilient retailers are those who move beyond headline fraud metrics, invest in longitudinal risk monitoring, and align operational efficiency with robust, customer-centric fraud prevention to sustain trust and growth in an increasingly digital retail environment.

Declining fraud rates don’t mean declining fraud risk