Sophisticated retail fraud techniques and services are becoming mainstream knowledge, with social media platforms serving as primary educational channels for would-be fraudsters.
That’s according to research from Netacea, which has uncovered what the firm calls ‘alarming’ shifts in consumer attitudes toward fraudulent behaviour.
An accompanying report, Cyberfraud in Retail – The Changing Face of Fraud: Malicious Intent Gets Organized, goes into greater detail on the tactics and techniques used by professional fraudsters and reveals the scale of underground marketplaces trading in stolen digital accounts and services.
Netacea’s research reveals strikingly high awareness of retail fraud among consumers, with 93% familiar with at least one type of fraudulent technique. Meanwhile, 81% specifically recognise the tactic of claiming an order didn’t arrive to receive a refund or replacement – known in the industry as DNA (Did Not Arrive).
Despite understanding the criminal nature of these activities, many consumers remain tempted to participate. Nearly one quarter (23%) of respondents admitted they’ve been tempted to commit fraud previously, while 15% would consider committing more serious retail fraud under the right circumstances, such as if they believed they would escape detection or if they knew of other people who had been successful in their attempt.
More concerning still, one quarter of consumers believe certain levels of retail fraud are acceptable, with 34% viewing fraud up to £100 as permissible. Many respondents (16%) consider it a victimless crime, while the majority (58%) assume retailers can and should absorb the costs of fraud without significant business impact or price increases for other customers.
Social media has become a key contributor to the growing retail fraud problem. Almost two-thirds of consumers (63%) have learned about retail fraud tactics through social media platforms, with nearly half (45%) encountering advertisements promoting ‘refund hacks’ or step-by-step guides, some even specific to certain retail brands.
These trends are particularly pronounced among younger demographics. Among people aged 18-30, social media awareness rises to 76%, with 58% of this cohort having been targeted by advertisements promoting retail fraud. Facebook leads as the primary platform where consumers encounter fraud content (especially among Gen X users), followed closely by TikTok (popular with Gen Z), then YouTube, Instagram, X/Twitter, and forums like Reddit.
However, the normalisation of fraud extends beyond digital spaces into personal relationships. People increasingly discuss retail fraud with friends, family, colleagues, and classmates, indicating a significant shift in social perceptions. This trend is especially evident in the US, where over a third of consumers (36%) have received recommendations for retail fraud from personal contacts or online connections.
With online shopping on the rise there is now ample opportunity for corrupt insiders to enable fraud within the fulfilment process, by manipulating systems and processes of even renting out their access to professional fraudsters. A staggering 18% of respondents claim to personally know someone involved in insider fraud, with most working at retailers (12%) or in fulfilment services (6%).
Photo by Dylan Gillis on Unsplash
