Retail and Ecommerce Companies Face More Than $5 in Costs for Every $1 Lost to Fraud Amid Rising Complexity

The 2026 LexisNexis True Cost of Fraud Study reveals that North American retail and ecommerce merchants now incur over $5 in total expenses for every $1 of direct fraud loss. This financial burden is compounded by the challenge of balancing security with customer experience, as more than half of surveyed merchants report increased customer churn linked to anti-fraud measures. The findings highlight a critical need for the sector to adopt integrated, multi-layered prevention strategies to mitigate revenue loss and maintain consumer loyalty in an increasingly complex digital environment.

The 2026 LexisNexis True Cost of Fraud Study for Retail and Ecommerce in North America reports that the total cost of fraud has reached $5.13 in the United States and $5.23 in Canada for every $1 of direct loss. This marks the first time the LexisNexis Fraud Multiplier has exceeded the $5 threshold in both markets, more than doubling since 2016 when the cost was approximately $2.40 per $1 lost. These rising figures are driven by a combination of operational, compliance, and reputational costs. Currently, 37% of retail and ecommerce organizations report significant revenue losses tied to fraud, with online and mobile channels accounting for up to 83% of fraud costs for ecommerce merchants.

The study emphasizes a growing conflict between fraud prevention and customer retention, as 56% of US retailers and 54% of US ecommerce merchants report increased customer churn linked to anti-fraud measures. Maanas Godugunur, senior director of fraud and identity at LexisNexis Risk Solutions, stated that the challenge for the sector lies in adapting to evolving attack vectors at scale without creating excessive friction. Common fraud types identified in the report include chargeback fraud, fraudulent returns, and lost or stolen merchandise. The complexity of these threats is further increased by the rise of agentic commerce, where AI-powered agents transact on behalf of consumers, a development that concerns more than two-thirds of US merchants.

Despite these challenges, organizations with high-maturity fraud prevention strategies are seeing significantly better outcomes than their less-prepared peers. Approximately 20% of high-maturity organizations reported decreased customer churn due to their fraud prevention efforts, compared to only 9% of low-maturity organizations. Furthermore, 19% of high-maturity businesses are stopping 1,000 or more fraudulent transactions per month, while only 4% of low-maturity businesses achieve the same scale. These successful organizations are increasingly moving toward integrated strategies that combine identity verification, device intelligence, and behavioral analytics across the entire customer journey.

The shift toward multi-layered fraud management is intended to align security goals with customer experience objectives. By utilizing advanced analytics and decision tools, retailers aim to improve detection accuracy and reduce the friction that leads to shopper abandonment. As fraud risk continues to be distributed across digital and physical channels, payment types, and various customer touchpoints, the report suggests that an integrated approach is essential for managing risk and driving growth in the current retail landscape.