When it comes to how organized retail crime (ORC) groups attack retailers, the battlefront has shifted online, where criminal networks exploit digital technicalities, manipulate e-commerce systems, and weaponize emerging technologies — often the same tech retailers use to protect themselves.
According to the Federal Trade Commission, U.S. consumers lost more than $12.5 billion to online fraud in 2024 — a 25% increase year-over-year. The Pew Research Center further found that nearly three-fourths of Americans have experienced an online scam. For retail supply chain executives, these numbers aren’t just consumer problems; they signal a widening threat to operational integrity, inventory accuracy, and brand trust.
Fraudsters evolve retail crime
In what’s a troubling turn of events for how retailers fight modern fraudsters, many online fraud rings now leverage AI to automate deception at scale. ORC teams use AI tools and photo-manipulation software to create fake receipts, false returns claims, and counterfeit documentation. These fraudsters can develop materials with alarming precision and within minutes with AI and other tools.
Common tactics that fraudsters employ include:
● AI-generated receipts and invoices that mirror a retailer’s exact format.
● Manipulated barcodes to alter pricing or trigger false “item not received” claims.
● Exploited BOPIS (buy-online, pick-up in-store) systems, using fraudulent payment data or cloned identities.
● Synthetic identity fraud, where stolen data is combined to fabricate believable customers or accounts.
These schemes often circulate in online communities too, where criminals share step-by-step methods and success stories. Some criminals even charge for their fraud services.
Ultimately, the more information criminals share, the faster retailer profits can shrink, resulting in hundreds of thousands of dollars. During tight economic times, fraud and claims abuse can dramatically impact a retailer’s bottom lines and the integrity of the supply chain.
AI protects the retail supply chain
Where retailers can use AI to their advantage, loss prevention specialists, retail associates, and supply chain managers can leverage unified, advanced analytics of all transactions happening across the organization. AI that’s embedded into the retailers’ omnichannel systems can help identify anomalies within the supply chain. With so much at stake, both online and in-store systems need to be in sync so AI can accurately monitor transactions and the supply chain.
For instance, AI-driven fraud prevention tools can scan billions of data points in real time — transactions, device fingerprints, behavioral patterns, and supply chain signals — to uncover unusual behaviors that are invisible to human analysts. Similarly, AI can review data provided by RFID tags on shipments and products to help track and monitor goods that have gone missing.
The technology is central to how retailers safeguard operations, doing so in a few ways such as:
- Detecting patterns across networks — Generative AI and machine learning can connect seemingly unrelated fraud events. By analyzing transaction data, location patterns, and return histories, AI systems can link multiple incidents back to a single ORC network. Once connections are made and thresholds met, retailers can escalate cases to felony-level theft investigations.
- Strengthening supply chain integrity — AI enhances visibility across the entire retail supply chain — from warehouse to last-mile delivery. Integrating AI with RFID tracking, computer vision, and sensor data helps identify diversion points where fraud or theft occurs. This not only safeguards inventory but strengthens coordination with logistics partners and law enforcement.
- Empowering loss prevention teams — Retail-focused AI tools offer conversational interfaces that guide investigators through data queries, helping them isolate suspicious activity or compare fraudulent claims. Some solutions can summarize investigation reports, generate video evidence logs, and prepare case files ready for law enforcement — reducing manual workloads and accelerating resolution.
Data acts as a new defense layer
Every retail transaction produces valuable insights. The challenge for supply chain executives lies in unifying this data across ecommerce, point-of-sale, returns, and logistics systems.
Fragmented data silos make it easier for criminals to hide, but AI unification platforms consolidate these data streams, making inconsistent or unusual activities — like identical customer profiles used in multiple states — instantly visible.
Additionally, predictive AI can flag future risks, such as patterns of abuse within a region or product line. Retailers can then adjust policies in real time — tightening return windows, adding authentication checkpoints, or monitoring high-risk fulfillment routes.
Supply chain executives can limit losses
Retail executives face mounting pressure to protect margins in an increasingly digital marketplace. As e-commerce continues to exceed $300 billion annually in the United States, fraud prevention must evolve beyond reactive strategies.
AI isn’t just a loss prevention tool — it’s a strategic asset for end-to-end supply chain resilience. By embedding AI across fulfillment, returns, and customer engagement systems, retailers can:
● Detect and disrupt organized crime before it reaches the balance sheet
● Improve customer trust through faster, more accurate returns processes
● Strengthen cross-department collaboration and law enforcement partnerships
Online fraud and organized retail crime will continue to evolve. But so will the technologies designed to stop them. By investing in AI-driven fraud detection and data unification, retail supply chain executives can turn one of the industry’s biggest threats into a competitive advantage — creating a safer, smarter, and more trusted retail ecosystem.
