The last decade’s retail revolution, mobile payments, digital wallets, and instant checkouts have made commerce borderless. But it has also made fraud borderless, faster, and more intelligent.

Fraudsters are early adopters of technology. They use AI to mimic consumer patterns, exploit policy gaps, and manipulate systems faster than most retailers can react to. In this arms race, even the most advanced GenAI-enabled fraud detection tools are not enough on their own.

The winning model for 2026 and beyond is human-machine harmony where technology delivers speed and scale, and humans deliver intent, context, and accountability. This is the foundation of CES’s 15-year fraud prevention and fraud management services for some of the world’s largest retailers and marketplaces.

The Business Impact of Modern Fraud

Retailers now face a systemic, data-driven fraud environment that directly affects both growth and profitability. It’s no longer just a cost of doing business; it’s a competitive disadvantage if left unaddressed.

Top-Line Impact

• Lost Sales: Up to 25% of declined transactions are legitimate, costing retailers’ revenue and long-term loyalty.
• Customer Trust: When genuine buyers face friction or rejections, 58% say they won’t return, turning fraud prevention into hidden churn.
• Conversion Leakage: Excessive verification and fraud hold create drop-offs across digital channels, reducing completed sales.

Bottom-Line Impact

• Chargebacks: Each fraudulent dispute costs $25–$50 beyond the lost product value.
• Operational Strain: Seasonal surges and manual reviews inflate costs and delay fulfillment.
• Policy Abuse: Friendly fraud and promotional misuse quietly erode margins through unrecoverable credits.
• Reputation Risk: Public disputes and social media backlash weaken digital trust and brand credibility globally.

Collectively, these pressures compress margins, slow growth, and erode brand equity.

Emerging Fraud Trends in 2026

The rapid evolution of digital commerce has outpaced traditional fraud prevention frameworks. Retailers now face an expanding mix of AI-driven, policy-based, and cross-border fraud tactics that demand a hybrid approach combining automation and human expertise.

• AI-Powered & Synthetic Fraud: Fraudsters now use generative AI and synthetic IDs to mimic real consumers and bypass identity checks.
• Policy Abuse & Friendly Fraud: False “item not received” claims and post-delivery chargebacks are rising sharply, quietly draining revenue.
• Account Takeovers & Loyalty Theft: Credential reuse and stolen reward balances are becoming high-value attack vectors.
• Cross-Border & Multi-Payment Risks: Global expansion exposes retailers to inconsistent verification and new forms of international fraud.
• Card Testing & Micro-Payments: Thousands of small, automated transactions are used to validate stolen cards before major purchases.
• Promotion & Referral Exploitation: Fake accounts and bots manipulate referral codes, loyalty offers, and gift programs, skewing analytics and profit.
• Peak-Season Fraud Spikes: Fraudsters exploit holidays and promotional periods when detection thresholds relax, and analyst capacity is limited.

These evolving threats highlight a single truth: no tool can do it alone.

Retailers need harmonized fraud detection ecosystems, where modern GenAI-enabled tools handle speed and scale, and human experts provide judgment, adaptability, and business context to keep fraud from becoming a growth barrier while maintaining digital trust in fraud management.

Bridging the Retail Fraud Divide-The CES Advantage

Even with advanced tools, retailers often struggle with:

• Automated models that lack business context, resulting in false declines and delayed fulfillment.
• High-risk transactions that exceed in-house review capacity during promotional surges.
• Rules and models that lag behind emerging fraud patterns.
• Limited coverage outside core time zones, delaying order validation.
• Cost and accuracy trade-offs, as expanding internal teams increases overhead.

CES bridges these gaps by pairing the speed of automation with the intelligence of experienced analysts—delivering reliable, scalable, and compliant fraud prevention and detection.

CES’s Human-Machine Fraud Model

CES’s hybrid operating model integrates seamlessly with a retailer’s existing fraud prevention and fraud detection platforms to deliver precision, coverage, and cost efficiency.

• Real-time queue review: CES analysts assess flagged transactions in real time, applying contextual and behavioral insights.
• Business-aware decisioning: Human reviewers understand promotional, seasonal, and operational nuances.
• 24×7 global coverage: Ensures consistent performance and turnaround during peak periods.
• Continuous learning loop: CES feeds human review outcomes back into clients’ detection systems to refine AI accuracy.
• Regulatory assurance: PCI DSS and SOC 2 compliant operations provide audit-ready confidence.
• Scalable workforce model: Rapidly adjusts to transaction surges during holidays or sales events without compromising SLA.

Case Study: Fashion & Home Goods Marketplace

Client:

A large global retailer operating across fashion, beauty, electronics, furniture, and home décor.

Challenge:

Despite using advanced AI-driven fraud detection tools, the retailer continued to face friendly fraud, return abuse, and delivery scams, resulting in rising chargebacks and revenue leakage. They needed a hybrid Human + Machine solution to improve accuracy, protect sales, and sustain digital trust with customers.

Solution:

CES implemented a real-time fraud validation model combining automation with expert analyst review.

• Reviewed 12,000+ high-risk orders monthly with 99.8% accuracy
• Approved $20.5M in valid transactions and blocked $12.3M in confirmed fraud
• Managed 1,800+ chargebacks per analyst per month with a 65% win rate
• Resolved 13,000+ billing activities monthly with 99.9% accuracy and 100% SLA adherence 

Results:

• 44% reduction in confirmed fraud losses
• $32M+ in high-risk transactions reviewed monthly
• Faster order approvals and improved customer satisfaction
• Scalable 24×7 coverage without additional headcount 

Why Retailers Choose CES

• 15 years of proven experience supporting major retailers and marketplaces
• PCI DSS & SOC 2 compliant global operations
• Cost-effective, scalable engagement model with 24×7 coverage
• Human-in-the-loop precision enhancing automated accuracy
• Flexible integration with modern GenAI-enabled fraud detection platforms
• Balanced performance KPIs, optimizing fraud prevention, compliance, and customer experience 

A Smarter Way Forward

Fraudsters continue to evolve faster than traditional systems can adapt. Modern automation provides speed, but human insight brings context, adaptability, and digital trust.

CES’s human-in-the-loop fraud prevention model ensures that retailers are not only protected but also empowered, achieving lower losses, faster fulfillment, and stronger customer confidence.

With CES as your trusted partner, fraud prevention becomes more than defense; it becomes a competitive advantage. Reach out to us at adrees.rana@cesltd.com to start your journey.