Retail suppliers often focus on rising freight costs, tariffs, and compliance deductions to evaluate profitability. E-commerce, however, has presented other obstacles: fraudulent purchases, refund abuse, and friendly fraud.

These behaviors create operational disruptions that extend far beyond a single transaction.

Fraud Becomes More Sophisticated 

Fraudulent purchases now include organized schemes designed to exploit retailer policies and operational gaps. Criminal networks will purchase merchandise before disappearing without payment using:

The result is additional customer service costs, shipping expenses, inventory imbalances, and operational inefficiencies.

Retailers continue investing heavily in fraud detection technology, but every fraudulent order still creates downstream costs that ripple throughout the supply chain.

Refund Fraud is Exploiting Retail Convenience 

Easy returns are a competitive advantage for retailers but they have also become an attractive target for abuse. Refund fraud takes many forms:

Many of these behaviors fall into gray areas that are difficult to identify immediately. Individually they may seem insignificant, but collectively they represent substantial financial losses and operational burdens.

Every fraudulent refund requires additional documentation, investigations, customer service resources, inventory reconciliation, and financial adjustments. These costs ultimately affect retailers, suppliers, and consumers alike.

Friendly Fraud Poses An Operational Challenge 

One of the fastest-growing concerns across retail is friendly fraud. Unlike traditional fraud, friendly fraud often originates from legitimate customers who dispute valid purchases or claim products were never received. They’ll even bypass customer service by filing chargebacks directly with their payment provider.

The impact extends well beyond the disputed transaction for retail suppliers. Increased chargebacks create:

Finance, customer service, logistics, and operations teams all become involved in resolving issues that may never have existed in the first place. This makes friendly fraud an operational challenge.

Vendormint Helps Protect More Than Revenue

Recovering lost revenue is only part of the solution. Vendormint helps retail suppliers improve visibility into the operational processes surrounding:

By connecting information across finance, supply chain, and operations, organizations gain a clearer understanding of where preventable losses originate and how to reduce them over time.

E-commerce fraud and refund abuse continues to evolve. The retail suppliers best positioned for long-term success will be those that combine operational discipline with the visibility needed to make confident, data-driven decisions.  

 What's Happening in the Retail Industry

The Mint Memo

Sources:

“Understanding fraudulent returns and mitigation strategies in multichannel retailing,” Journal of Retailing and Consumer Services: https://www.sciencedirect.com/science/article/pii/S0969698922002387

“The Supply Side: Retailer chargebacks could hurt margins for vendors,” Talk Business & Politics (TB&P): https://talkbusiness.net/2026/01/the-supply-side-retailer-chargebacks-could-hurt-margins-for-vendors/

“Friendly Fraud is Rising for More Than 83% of Enterprise Merchants, New Chargebacks911 Study Finds,” BusinessWire: https://www.businesswire.com/news/home/20260630978374/en/Friendly-Fraud-is-Rising-for-More-Than-83-of-Enterprise-Merchants-New-Chargebacks911-Study-Finds

“Friendly Fraud and the Breakdown of Transaction Authenticity,” Retail TouchPoints: https://www.retailtouchpoints.com/executive-viewpoints/auto-draftfriendly-fraud-and-the-breakdown-of-transaction-authenticity/619092/

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