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A Hardware Retailing report by Luke Vander Linden outlines fraud risks facing small retailers, including return fraud, stolen payment cards, account takeovers and supplier impersonation. It recommends layered safeguards such as updated point-of-sale systems, multi-factor authentication, verification procedures and regular transaction reviews.
Hardware Retailing has published guidance for small business owners on recognizing and preventing retail fraud, warning that artificial intelligence and automation can help criminals scale scams while online sales create more opportunities for attacks. The report by Luke Vander Linden recommends layered protections, including tighter payment controls, account security and checks on refunds and vendor payment changes.
The report identifies several threats that can affect hardware stores and other small retailers: fraudulent returns, stolen payment-card use, gift-card tampering and account takeovers. Examples of return fraud include seeking refunds for stolen goods, presenting fake receipts or returning counterfeit merchandise. Criminals may also use stolen credentials to access a customer’s loyalty or online account and make purchases that appear to come from a trusted shopper.
Vander Linden cites figures that put the risks in context. E-commerce accounted for 16.4% of total U.S. retail sales in 2025, according to the report. It also says the retail industry was projected to process $849.9 billion in merchandise returns in 2025, with 9% classified as fraudulent. The report cites a Federal Reserve survey in which 16% of U.S. adults said they had experienced credit-card fraud.
The recommended safeguards focus on routine operations. Businesses should keep point-of-sale software updated, limit administrative access and require 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, setting clear procedures for refunds and vendor-payment changes, and giving employees a clear way to escalate unusual requests.
How Fraud Can Hit Small Retailers
Fraud can impose costs even when a retailer is not the direct target of a stolen account or card. A fraudulent purchase may lead to lost merchandise or a chargeback after the payment is reversed. Fake refunds and altered gift cards can also drain revenue or inventory, while a compromised supplier relationship can expose payments or sensitive information.
The report’s focus is on the gap between the range of risks and the resources available to independent businesses. Small stores may carry high-value goods that can be resold without having dedicated fraud-prevention staff. Layered procedures can help reduce reliance on a single employee’s judgment or on security tools that trust a familiar customer account.
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Retail Fraud Across Sales Channels
The article describes a changing retail environment in which sales and communications happen both in stores and online. That gives fraudsters multiple possible entry points, from a point-of-sale terminal or customer account to an email invoice or refund request. The source says newer technologies, including AI and automation, can make impersonation attempts more convincing and allow scams to be carried out at greater scale; it does not quantify how much these tools have increased fraud.
Some methods remain familiar, the report says. Criminals may impersonate trusted contacts, push employees to act quickly or seek exceptions to normal procedures. The article points to business email compromise, or BEC scams, as a risk for retailers that receive large volumes of invoices and payment requests. Its supplied text begins an example involving a fake supplier invoice but ends before describing the full set of scenarios.
““No business is immune to modern fraud threats.””
— Luke Vander Linden, writing in Hardware Retailing
Limits of the Available Guidance
The supplied source material does not give a publication date or identify a specific new fraud incident, business or enforcement action. It is a prevention-focused report, not evidence that a particular retailer has been defrauded. The cited figures also describe broader retail returns and consumer-reported card fraud, rather than losses at hardware stores specifically.
The available text does not provide the full warning-sign checklist or complete descriptions of the BEC scenarios it introduces. It also does not quantify the share of fraud attributable to AI, compare the effectiveness or cost of individual safeguards, or state whether the recommendations have been tested across small retailers.
Controls Owners Can Review Now
The report offers operational steps rather than a scheduled policy change or upcoming milestone. Owners can review who has access to payment systems and sensitive accounts, whether software is current, and which actions require manager approval. They can also check whether staff know how to verify a refund or a request to change supplier payment details using an established contact method, rather than relying only on the request itself.
Regular comparison of transaction and inventory records can help identify patterns that warrant closer review. The article suggests watching for repeated chargebacks on similar transactions or recurring high-value refunds linked to the same account. It does not set a timetable for these reviews; businesses would need to choose a schedule and response process suited to their operations.
Key Questions
What fraud risks does the report identify for small retailers?
It discusses fraudulent returns, stolen payment-card use, gift-card fraud, account takeovers and business email compromise, including fake supplier invoices.
Which safeguards does Hardware Retailing recommend?
The report recommends updating point-of-sale software, restricting administrative access, requiring approval for high-risk refunds, using multi-factor authentication, setting verification procedures and reviewing transaction and inventory records.
Why can a retailer be affected by a stolen customer card?
A fraudulent purchase may result in lost goods or a chargeback if the payment is later reversed, according to the report.
Does the report describe a specific fraud case?
No. The supplied article text provides general prevention guidance and industry figures, not details of a specific retailer or incident.
What should employees do with an unusual payment request?
The report advises using clear procedures to verify requests and giving staff a direct way to escalate suspicious activity, rather than asking them to make exceptions under pressure.
Source: hardwareretailing.com
