Retail fraud surges in UK, costing businesses millions

A rise in retail fraud has hit UK businesses hard in the first half of 2024, according to a recent report by payments specialist Dojo. The company's analysis of data from the National Fraud Intelligence Bureau (NFIB) reveals a staggering 545 percent increase in reported cases compared to the same period in 2023.

The financial impact has been severe, with losses soaring to 5.4 million pounds in the first six months of 2024, a nearly 2,000 percent increase from the previous year's 258,300 pounds This surge comes despite efforts by retailers to curb fraudulent activities, including the introduction of paid returns policies.

The fraud landscape is diverse, encompassing tactics such as returning stolen goods for legitimate items and price tag manipulation. Of particular concern is the rise of 'clothing haul' videos on social media, which may be contributing to increased instances of 'bracketing' - the practice of ordering multiple sizes with the intention of returning most items.

Small companies hit the hardest

Limited companies have been the hardest hit, reporting 598 cases of retail fraud, Dojo’s data revealed. This vulnerability may stem from budgetary constraints limiting investment in fraud detection technologies and training, a challenge faced by many small and medium-sized enterprises in the retail sector.

Naveed Islam, Chief Information Security Officer at Dojo, advises businesses to strengthen their defences through robust returns policies, staff training in fraud detection, and investment in CCTV monitoring. These measures, he suggests, could help mitigate the growing threat of retail fraud in an increasingly challenging business environment.

As the retail sector grapples with this surge in fraudulent activity, the implications for consumer trust, operational costs, and overall profitability are likely to be significant. The industry may need to reassess its strategies and potentially lobby for stronger legal protections to combat this rising tide of retail fraud.