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A Hardware Retailing report by Luke Vander Linden describes how fraud can affect small retailers through returns, stolen payment cards, gift cards and compromised customer accounts. It recommends layered controls, including updated point-of-sale software, multi-factor authentication, verified refund and vendor-payment procedures, and regular reviews of transactions and inventory.
Hardware Retailing has published guidance for small-business owners on recognizing and preventing retail fraud, detailing risks including fraudulent returns, stolen payment cards, gift-card abuse and account takeovers. The report says newer tools such as artificial intelligence and automation can help scammers scale attacks, while independent retailers may have fewer dedicated resources to detect them.
The report, written by Luke Vander Linden, points to online sales as one factor broadening retailers’ exposure: e-commerce accounted for 16.4% of total U.S. retail sales in 2025, according to the figures cited in the article. It also notes that hardware and home-improvement stores can carry high-value goods that are easy to resell, making them potential targets even when they are much smaller than national chains.
Among the methods described are attempts to return stolen goods, use fake receipts for refunds or return counterfeit products for full-value reimbursements. The report cites a projection that U.S. retailers would process $849.9 billion in merchandise returns in 2025, with 9% classified as fraudulent. It also cites a Federal Reserve report in which 16% of U.S. adults said they had experienced credit-card fraud. Those figures describe different measures and do not establish how often a particular small retailer will be targeted.
The recommended safeguards include keeping point-of-sale software updated, limiting administrative access, and requiring manager approval for high-risk actions such as large refunds. The report also advises using multi-factor authentication on banking, email and other sensitive accounts; verifying refund requests and vendor-payment changes; giving staff a clear way to escalate suspicious requests; and reviewing transaction and inventory records for recurring patterns.
Controls Can Reduce Retail Losses
For a small retailer, a fraudulent payment or refund can mean lost inventory, a chargeback or money sent to a criminal posing as a supplier. The report’s emphasis is on reducing opportunities across multiple points of a business, rather than relying on a single fraud filter. Written procedures and staff escalation routes can help employees respond consistently when a request is urgent, unusual or asks them to bypass normal checks.
The advice also addresses both external and internal risks. A compromised account can make an attacker appear to be a legitimate customer or business contact, while excessive staff access to a point-of-sale system can make unauthorized refunds harder to prevent. Regular review of refunds, chargebacks and inventory discrepancies may help owners spot patterns that warrant further investigation.
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How Retail Fraud Reaches Stores
The report describes retail fraud as a set of different tactics, not one type of incident. In addition to returns and card misuse, criminals may tamper with gift cards, buy them using stolen payment details or use stolen credentials to take over loyalty and online accounts. When a purchase is later reversed, a retailer may bear costs even if the original theft involved a customer’s card information.
Business email compromise, or BEC, is another risk covered in the source. These scams imitate routine communications from trusted suppliers or other contacts to redirect payments or obtain sensitive information. The supplied report excerpt begins an example involving a fake supplier invoice but ends before giving the full scenario or its complete warning signs, so further specifics cannot be confirmed from the provided material.
““no business is immune to modern fraud threats.””
— Luke Vander Linden, Hardware Retailing
Risks Vary by Store
The supplied report does not provide store-specific fraud rates, a forecast of losses for small retailers, or evidence measuring how much each recommended control reduces incidents. The cited return and credit-card figures describe broad industry or population measures, not the likelihood that a particular business will experience fraud. The report excerpt also cuts off during its discussion of fake supplier invoices, leaving the complete list of BEC warning signs unavailable here.
It is also not clear from the supplied material when the article was published. Its 2025 figures are presented as historical or projected data; they should not be read as current-year estimates without checking the underlying sources and their methodologies.
Build and Review Store Procedures
The report’s guidance points owners toward practical next steps: review who can access payment systems, turn on multi-factor authentication for sensitive accounts, and document how staff should handle refunds and changes to supplier payment details. Businesses can also set approval thresholds for unusual transactions and establish a direct, known channel for checking requests rather than relying on contact details supplied in a suspicious message.
Owners can then compare transaction, chargeback and inventory records regularly and revisit controls when they see repeated anomalies. The source does not announce a new regulation, deadline or follow-up study; it offers prevention advice, while the effectiveness of any specific measure will depend on each retailer’s systems and operations.
Key Questions
What fraud methods does the report describe?
It discusses fraudulent returns, stolen payment-card use, gift-card abuse, account takeovers and business email compromise aimed at redirecting money or obtaining sensitive information.
What should a small retailer do to protect its point-of-sale system?
The report recommends keeping POS software updated, restricting administrative access and requiring manager approval for high-risk actions such as large refunds or overrides.
How can staff respond to unusual refund or payment requests?
Set clear procedures for refunds and vendor-payment changes, and give employees a direct way to escalate suspicious requests instead of making exceptions under pressure.
Do the figures cited show the risk for an individual store?
No. The cited figures concern U.S. retail returns and adults’ reported experience with credit-card fraud. They do not establish the probability or expected losses for a particular business.
Source: hardwareretailing.com
