US retailers are adopting a new industry framework to better understand and respond to changing fraud risks as criminals use more advanced methods across stores and digital channels.
The National Retail Federation (NRF) has released an updated retail fraud taxonomy, a classification system designed to help retailers, technology companies, financial organisations and public agencies use a common language when identifying fraud threats.
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The update reflects a changing retail environment where fraud is no longer limited to traditional theft. Businesses now face a wider range of challenges, including online scams, payment abuse, account takeovers and organised criminal activity.
Fraud threats are changing
Retail fraud has become more complex as shopping habits have shifted towards ecommerce, mobile payments and connected retail services.
Criminals are increasingly using technology and online networks to target retailers and customers. This has made it harder for businesses to identify fraud patterns and respond quickly.
The NRF said the updated taxonomy reflects “the evolution of retail fraud” and provides a clearer way for the industry to describe different types of fraud.
The framework was developed with input from retailers and security experts, including Target Corporation and The Chertoff Group. It builds on industry experience to create a more consistent approach to identifying fraud methods and risks.
Rather than focusing only on individual incidents, the system groups fraud by the way it happens, the targets involved and the potential response.
Retailers seek common language
The NRF said a shared approach can help different organisations work together more effectively.
Retail fraud often involves several parts of the retail system, from online platforms and payment providers to physical stores and supply chains. A common classification system can help businesses compare information, identify patterns and improve prevention efforts.
The NRF said the updated framework gives retailers and other stakeholders “a shared language to describe fraud” and supports better cooperation between industry groups, financial institutions, law enforcement agencies and policymakers.
For retailers, the guide can support fraud monitoring, staff training, risk assessments and decisions about security investments.
The framework is also designed to support information sharing. As fraud methods change quickly, businesses need reliable ways to track new threats and understand how they affect different parts of their operations.
Digital fraud remains a major focus
The growth of online shopping and digital payments has created new challenges for retailers worldwide.
Fraud can now take place across multiple channels, including ecommerce websites, mobile apps, online marketplaces and payment systems. Criminal groups can also adapt their methods quickly, making prevention more difficult.
The NRF’s updated taxonomy is intended to evolve alongside these changes, giving retailers a structured way to review emerging risks and improve their responses.
For the global retail sector, the development highlights the growing importance of cooperation and shared information in tackling fraud. As retailers continue to combine physical and digital shopping experiences, understanding how fraud operates across the wider retail ecosystem is becoming increasingly important.
