That’s according to new research from the National Retail Federation (NRF), which finds external theft and fraud cases on the rise, even as the average number of shoplifting and merchandise theft cases declined for the first time in several years. The research, released last week, attributed this trend to merchants’ efforts to protect their goods, workers and shoppers.
“After years of rising in-store theft, retailers are beginning to see levels stabilize, driven by investments in technology and employee training to strengthen store security and improve response to these crimes,” NRF Vice President for Asset Protection and Retail Operations David Johnston said in a news release.
“However, significant challenges remain as organized criminals continue to exploit vulnerabilities throughout the retail environment as seen in the rise of various fraud schemes and thefts including cargo theft, phone scams and gift card fraud.”
The research shows criminals shifting from shoplifting to other forms of “more sophisticated” theft, with retailers reporting higher rates of phone scams (69%) loyalty fraud (51%) and gift card theft or fraud (42%).
In terms of combating these crimes, the report said that retailers are adopting a variety of new technology, though the use of artificial intelligence is in its early stages, “as retailers continue to research and understand how various AI-related asset protection tools can benefit an organization.”
“Some technologies like AI-based ecommerce fraud detection analytics and generative AI tools and large language models used for routine tasks are more adopted by retailers today than other AI-based or AI-capable technologies,” the report added.
That’s in keeping with research by PYMNTS Intelligence, which found that retailers are using adaptive machine learning systems to identify anomalies in real time, reducing false positives by up to 85% while doubling compromised card detection.
However, only 37% of retailers use generative AI for fraud prevention, even though nearly three-quarters of the merchants surveyed said they expected cases of AI-driven fraud to grow.
Additional research by PYMNTS Intelligence shows that 85% of merchants said their main fraud-related challenge is preventing these incidents without harming the customer experience. And 51% of global eCommerce merchants said they expected fraud-management staffing costs to stay flat or decrease, even as 63% plan to spend more on fraud-prevention technology.
