Retail and e-commerce companies are facing escalating fraud-related costs amid growing pressure to maintain seamless customer experiences. The “LexisNexis True Cost of Fraud Study 2025 North America” highlights the increasing financial burden of fraud and the challenge of balancing security with frictionless customer journeys.
The study finds that the total cost of fraud now exceeds $5 for every $1 of direct loss in both the U.S. and Canada, reaching approximately $5.13 in the U.S. and $5.23 in Canada. This marks the first time the LexisNexis Fraud Multiplier has surpassed the $5 threshold in both markets, the company said.
Fraud continues to have a measurable impact on business performance. The study shows that 37 percent of retail and e-commerce organizations reported significant revenue losses tied to fraud over the past year. At the same time, efforts to strengthen fraud controls are increasing customer friction, with 56 percent of U.S. retailers and 54 percent of U.S. e-commerce merchants reporting increased customer churn linked to anti-fraud measures.
“While it’s no surprise fraud continues to evolve in scale and sophistication, the challenge for retailers and e-commerce providers is adapting to changing attack vectors at scale,” said Maanas Godugunur, senior director of fraud and identity at LexisNexis Risk Solutions. “Survey results are clear: organizations that take a more integrated, multi-layered approach to fraud prevention are better positioned to protect their customers, deliver superior customer experiences and, in turn, increase customer loyalty, manage risk and drive growth.”
The study also highlights fraud’s growing complexity, noting that risk is increasingly distributed across digital and physical channels, payment types and customer touchpoints. Online and mobile channels now account for the majority of fraud costs, representing up to 83 percent for e-commerce merchants. Common fraud types include chargeback fraud, lost or stolen merchandise and fraudulent returns, reflecting the broad range of threats facing merchants.
The financial impact of fraud has also risen significantly over time. The fraud multiplier has more than doubled over the past decade, increasing from approximately $2.40 per $1 of loss in 2016 to more than $5 today, driven by operational, compliance and reputational costs tied to fraud management.
The report also identifies emerging risks linked to the rapid growth of agentic commerce, where AI-powered agents transact on behalf of consumers. More than two-thirds of U.S. merchants report concern about fraud risks associated with these transactions. These developments are introducing new fraud vectors and increasing demand for more adaptive controls.
Despite these challenges, the study finds that organizations with more mature fraud prevention strategies are achieving stronger outcomes. Twenty percent of high-maturity organizations reported decreased customer churn due to fraud prevention efforts, compared with 9 percent of low-maturity organizations. High-maturity organizations are also more effective at scale, with 19 percent stopping 1,000 or more fraudulent transactions per month, compared with 4 percent of low-maturity businesses.
In response, LexisNexis said retail and e-commerce organizations are increasingly shifting toward integrated, multi-layered fraud prevention strategies that combine identity verification, device intelligence and behavioral analytics across the customer journey. These approaches are helping improve detection, reduce friction and better align fraud management with customer experience goals.
