Retail saw a 330% increase in AI fraud in 60 days

Listen now

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AI changed the script for retail scams.

Retail fraud has entered a new era—and it’s powered by AI. Fraudsters are using AI and machine-learning technologies to attack at unprecedented speed and scale. These aren’t isolated scams or human-driven schemes. AI-enabled attacks are automated, adaptive, and designed to appear like normal customer behavior.

Listen to a deepfake call in retail.

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Return fraud as a continuous attack.

One of the most damaging schemes is AI-powered return fraud. Attackers deploy bots equipped with common scripts that initiate return requests on retail sites. The strategy is intentional: target low-dollar refunds that stay below a certain threshold to avoid suspicion. One refund is small. Thousands of them are not.

What the data tells us about attacker behavior.

Retailers are already feeling the shift. Among Pindrop customers in retail, there was a 56% month-over-month increase in non-live fraud in November. In comparison, live fraud dropped by 69% in the same period.¹ The numbers imply that AI fraud is increasingly popular as attackers discover the best ways to scale their operations and build their models. Legacy checks like passwords, KBAs, and OTPs are crumbling under this sophisticated tactic.

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item: 56% | month-over-month increase in non-live fraud in November.¹

item: 69% | drop in non-AI fraud in November.¹

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Small refunds, compounding losses.

AI attacks in retail may not be big or obvious. Return fraud thrives with high volume, low value, and automated attacks. Left unchecked, these “small” losses compound into serious financial damage. For example, a $21 return at a major retailer might not raise major red flags. But when bots are working non-stop, each successful return starts to add up—potentially leading to devastating losses.