Today I’m digging into ecommerce fraud rates, because this is one of those moments when a lot of companies are looking at sales numbers, trying to understand what “normal” even means now, and realizing that fraud does not always follow the same trajectory as revenue.
That is the part I want people to pay attention to.
Online sales surged during Covid. Now a lot of that growth is normalizing. Some categories are cooling off, some are staying stronger, and a lot of businesses are feeling the pressure that comes with that shift. But fraud losses in ecommerce are not necessarily dropping at the same pace. In a lot of cases, the fraud problem is just changing shape.
And that matters.
Because if you only look at chargebacks, you are probably missing a much bigger story. Refund fraud growth, promo abuse trends, account takeover fraud, and stored value fraud all affect the business too. So in this episode, I’m breaking down what post-Covid ecommerce trends may mean for fraud teams, trust and safety leaders, and merchants trying to plan around a more complicated version of online sales normalization.
Here is what that means in practice:
- Ecommerce fraud rates do not always decline just because sales growth slows
- Fraud losses in ecommerce often shift into other categories when chargeback focus is too narrow
- Post-Covid ecommerce trends matter because changing customer behavior changes fraud exposure too
- Ecommerce risk management gets stronger when teams measure total fraud impact on revenue
What you’ll hear in this episode:
- How post-Covid ecommerce trends are changing the context around ecommerce fraud rates
- Why fraud rate trends may not move in lockstep with ecommerce sales decline
- What refund fraud growth, promo abuse trends, and account takeover fraud mean for total loss
- Why stored value fraud deserves more attention as online sales normalization continues
- What these changes may mean for trust and safety industry trends, valuations, and planning
You should listen to this episode if you:
- Work in fraud, risk, ecommerce, or trust and safety and want a clearer view of ecommerce fraud rates
- Need to think beyond chargebacks when measuring fraud losses in ecommerce
- Are tracking post-Covid ecommerce trends, online sales normalization, or retail fraud forecasting
- Want a better framework for ecommerce risk management and fraud trend analysis
- Care about how fraud impact on revenue affects strategy, budgeting, and business decisions
If you liked this episode, be sure to subscribe and review the podcast on iTunes, Spotify, YouTube, or wherever you listen to podcasts. It really helps with getting the word out.
Episode notes & key takeaways
In this episode, I’m looking at what happens when ecommerce growth slows down after a major surge, but fraud does not neatly follow it back down. Because that is usually where companies get caught off guard. They expect one part of the business to normalize, and assume the risk will normalize with it. It usually does not work that way.
Why ecommerce fraud rates do not simply track sales volume
Let’s break this down.
A lot of people assume that if ecommerce sales decline from the highs of the last couple of years, fraud should naturally cool off too. Sometimes it does a little. But that is not the full story. Ecommerce fraud rates are shaped by much more than volume alone. They are shaped by pressure, incentives, customer behavior, control quality, and which channels or products are most attractive to bad actors at a given moment.
That is why this matters.
As online sales normalization continues, some businesses are going to see fewer transactions overall but a more expensive mix of fraud. Or the same fraud pressure spread across a smaller volume base. Either way, the math can feel worse, not better, if teams are not looking at the right things.
- Ecommerce fraud rates are influenced by more than just total transaction volume
- Fraud rate trends can stay elevated even when ecommerce sales decline
- Post-Covid ecommerce trends change where fraud appears, not just how much exists
- Retail fraud forecasting should focus on exposure and attack mix, not revenue alone
Why fraud losses in ecommerce go beyond chargebacks
Here’s what’s actually happening.
One of the biggest mistakes companies make is treating chargebacks as the main scorecard for fraud. Chargebacks matter, obviously. But if that is all you are measuring, you are probably undercounting the damage.
Because fraud losses in ecommerce often show up in other places first.
Refund fraud growth. Promo abuse trends. Account takeover fraud draining customer value. Stored value fraud. Loyalty abuse. Customer support costs. Manual review load. Those are all real losses, even if they do not show up in the classic fraud ratio everyone is staring at in the dashboard.
Right.
And that is why fraud impact on revenue needs to be measured more honestly.
- Fraud losses in ecommerce include much more than card fraud and chargebacks
- Refund fraud growth and promo abuse trends can quietly erode margin over time
- Account takeover fraud often creates customer churn and operational cost in addition to direct loss
- Ecommerce risk management improves when teams look at total loss, not just one category
How online sales normalization changes fraud pressure
This is where things get interesting.
As consumers return to more “normal” buying habits, companies are seeing a different ecommerce environment than they saw during peak Covid growth. Some categories are softening. Some teams are under pressure to cut costs. Some companies are rethinking headcount, tooling, or growth expectations. That environment changes fraud pressure too.
Because fraud adapts.
If the easiest path to revenue is changing, the easiest path to abuse is often changing too. Bad actors are not loyal to one fraud type. They follow weak controls, easy monetization, and operational blind spots. So when online sales normalization happens, it is not enough to ask whether sales are up or down. The better question is where the new weak points are.
- Online sales normalization can expose new fraud vulnerabilities as business priorities shift
- Company valuation and fraud often become more connected when growth slows and margins matter more
- Fraud trend analysis should account for operational changes, not just customer demand changes
- Trust and safety industry trends often reflect where businesses are cutting back or rebalancing
Why trust and safety teams need a broader view now
I think this is one of the most important parts of the conversation.
Trust and safety teams have to understand that the business is entering a period where every loss category may get more scrutiny. Not less. If valuations are under pressure and companies are more focused on efficiency, then fraud programs need to be able to explain what they are protecting in much broader terms.
Not just chargebacks.
Not just decline rates.
Not just one KPI.
The teams that do this well are the ones that can explain the full fraud impact on revenue and connect it to business planning. That is how fraud work gets taken seriously when the market changes.
- Trust and safety industry trends are shifting toward broader accountability for total loss
- Ecommerce risk management depends on connecting fraud metrics to business outcomes clearly
- Fraud impact on revenue becomes more important when companies face budget pressure and slower growth
- Fraud trend analysis should help leadership understand the real shape of the risk
What merchants should be watching next
So what should merchants and fraud teams be doing with all of this?
Start by reviewing where losses are really coming from now, not where they came from two years ago. Revisit how you measure fraud. Look at refunds, promos, account abuse, stored value, and customer friction alongside chargebacks. And be careful about assuming that lower growth automatically means lower risk.
That usually does not hold up.
The businesses that navigate this better will be the ones that treat ecommerce fraud rates as part of a bigger operating picture. Not just a fraud team metric. A business signal. Because once you understand where the losses are moving, you can make better decisions much earlier.
The big takeaway from this episode is pretty straightforward. Ecommerce fraud rates after Covid are not just about whether fraud went up or down. They are about how fraud is shifting as online sales normalize, and whether companies are measuring the full cost of that shift accurately enough to respond well.
