Topic starter
11/07/2026 2:01 pm
TL;DR: Chargeback losses at two luxury brands that paused in-store fraud reviews rose to $1.3M+ and $800K+ within six months, then returned to near zero after protection was reinstated, according to Riskified. The lesson for practitioners is that suppressed fraud can look invisible until controls are removed, at which point the operational and financial exposure becomes measurable fast.
Editorial analysis by NHI Mgmt Group, based on content published by Riskified: “These retailers paused in-store fraud reviews. Here’s what happened next”.
By the numbers:
- Brand B saw $800K+ in chargeback losses over six months after fraud protection was paused.
- Brand A reportedly achieved a 1600% ROI once fraud protection was reinstated.
- Brand B reportedly achieved a 600% ROI once fraud protection was reinstated.
Key questions
Q: What breaks when in-store fraud review is turned off?
A: When in-store fraud review is turned off, the control stops absorbing suspicious transactions before they become losses.
Q: When should merchants prioritise fraud prevention over fraud detection in the checkout flow?
A: Prioritise prevention when you already understand the risk pattern and can stop it before damage occurs, such as repeated payment attempts, unsupported geographies, or account creation abuse.
Q: What are the signs that in-store fraud controls are failing?
A: Common signs include rising chargeback costs, more dispute tickets, heavier workload for internal teams, and a gap between low visible fraud and poor financial results.
Practitioner guidance
- Baseline suppressed fraud, not just visible fraud Compare chargeback trends, declined transactions, and dispute volume against periods when fraud reviews were active so you can estimate the loss that the control is preventing.
- Assign clear ownership for leased register risk Document which party owns fraud policy, review funding, dispute handling, and financial liability across the retailer and partner brands before changing the control model.
- Test control removal before opting out Use brand-level projections, historical approval data, and prior fraud patterns to model the cost of pausing reviews before anyone makes the decision permanent.
Bottom line: The article shows that in-store fraud can remain hidden while controls are active, then surface quickly as chargebacks once review is paused.
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11/07/2026 2:11 pm
In-store fraud is a control visibility problem before it is a loss problem. When effective fraud review works, practitioners lose sight of the attacks it stops, and that can make the environment look safer than it is. This is a governance failure in measurement, not a failure of merchant intuition. Teams should therefore judge fraud programmes by suppressed loss and residual exposure, not by visible incident volume alone.
A few things that frame the scale:
- Nearly 60% of companies reported that fraud losses were still increasing in 2025.
A question worth separating out:
Q: Who should own in-store fraud accountability in leased register models?
A: Ownership should sit with the party that can make the policy decision and bear the financial outcome, usually through a shared model between retailer and partner brand. If one side funds the control while the other absorbs the losses, opt-outs become more likely. Clear accountability is essential when register operations and brand economics are split.
👉 Read our full editorial: In-store fraud protection is a visibility problem, not a checkout problem