• Retail fraud is rising — and it’s costly for small businesses.
  • Monitor continuously: set alerts for unusual purchases, multiple refunds, or suspicious logins to catch issues in real time.
  • Protect accounts and data with strong passwords, limited admin access, and regular reconciliations; use Positive Pay and account alerts to stop fraud before it clears.
  • If fraud hits, contact your bank immediately, freeze affected accounts, document everything, and review controls.

Retail fraud has become more frequent in today's digital and hybrid shopping environments. Its consequences are costly, especially for small businesses, where financial losses, disrupted operations, and diminished customer trust cause devastating impacts.

This article shows you how to recognize, prevent, and respond to retail fraud and how a trusted banking partner may help support your protection and recovery efforts.

Common Types of Retail Fraud

These common types of fraud have a significant impact on small businesses:

  • Payment fraud. Fraudsters use stolen credentials or cloned cards to make unauthorized purchases, and small businesses often have to bear the costs and hassle of dealing with chargebacks. 
  • Account takeover (ATO). Criminals gain access to business or customer accounts through stolen passwords or phishing scams to manipulate transactions and financial data.
  • Refund or return fraud. False returns or exchanges, such as using counterfeit receipts or returning stolen merchandise, erode profits and lead to merchandise loss.
  • Phishing and social engineering. Bad actors pose as vendors, banks, or partners to trick business owners into sharing sensitive information or transferring funds.

Stay Safe from Impersonation Scams

Phone and text messaging scams target businesses of all sizes. The following reminders can help you protect your business and keep your financial information safe from these scams:

  • Never provide confidential information, such as your PINACLE login credentials from PNC, to anyone contacting you by phone or text message or directing you to a website to enter this information. 
  • A trusted financial institution like PNC will never contact you via phone or text to request your login credentials or personal information.
  • Never enter your login credentials for your financial institution on a website from a text message link. Instead, navigate to its website from a saved bookmark or favorite.
  • Be cautious with urgent requests. Messages requiring "immediate action" are typically a red flag for scams, and you should pause before responding or taking action.

How To Strengthen Your Transaction Security

Fortunately, you may take proactive measures to protect your business from retail fraud. Here's how to take control:

Adopt Secure Payment Technology

Upgrade to card acceptance hardware with EMV chip readers and add contactless payment options to combat counterfeit card fraud. Also, use end-to-end encryption and tokenization to safeguard payment processing for both in-store and e-commerce transactions.

Implement Multi-Factor Authentication (MFA)

Require employees to set up MFA to access point-of-sale (POS) systems and online banking platforms. MFA adds an extra verification step to prevent unauthorized access, even if passwords are compromised.

Monitor for Suspicious Activities

Set alerts for large or unusual transactions, multiple refunds, or suspicious login attempts. Ask your banking partner about automated fraud detection tools, which may help identify red flags in real-time.

How To Protect Your Accounts and Data

In addition to the latest technology, follow cybersecurity best practices to protect your information. For example, separate your business and personal accounts to reduce risk exposure and simplify fraud monitoring. Also, use strong passwords and implement strict access policies (e.g., limiting administrative privileges and prohibiting shared logins) to strengthen your defense.

Regularly reconcile your accounts through daily reviews to identify discrepancies early, allowing you to freeze transactions and prevent further losses. PNC customers may utilize our fraud monitoring tools and digital security features, including Positive Pay (a service that matches checks or ACH transactions presented for payment against a list of authorized items the business provides) and account alerts, to safeguard their accounts and detect suspicious transactions before they are cleared. Your bank or payment service provider will never call or email you for your credentials. Never give out account access information over the phone or via email.

How To Respond to Fraud Incidents

Take these steps if you suspect fraud:

  • Notify your financial institution immediately.
  • Freeze affected accounts or cards to contain damage.
  • Document incident details for investigation.

After containing the immediate threat, conduct a post-incident review to strengthen internal controls. Additionally, an experienced banking partner may be able to help guide your recovery efforts and help prevent future incidents.

Prevent Retail Fraud with a Trusted Banking Partner

Your bank may play an integral role in helping you combat retail fraud. As a PNC customer, you may access treasury management tools to monitor cash flow and flag irregular or suspicious activities in real-time. You may also leverage our merchant services to implement secure payment gateways and data encryption protocols. Moreover, our fraud prevention programs are tailored to small retail businesses, providing you with the right tools and support.

Retail fraud won't go away, but you may be able to protect your business by choosing the right banking partner. From secure payment systems and proactive monitoring to business continuity and recovery support, PNC's experienced bankers and financial tools help safeguard your business against fraudulent transactions.

Learn more about our fraud mitigation solutions for small businesses to see how we may be able to help you stop fraudsters in their tracks.