Fraudulent returns and refunds now the most common fraud types threatening retailers…

Nearly half of UK retailers are considering closing or scaling back operations in 2026 as fraud intensifies, according to new research from European fintech firm payabl..

The company’s Fraud in Europe report found that 48% of retail leaders have actively weighed downsizing or exit plans, citing mounting losses, operational disruption and declining customer trust.

Fraudulent returns and refund abuse are now the most common threat, affecting 44% of retailers, followed by card fraud (36%) and chargeback or “friendly” fraud (31%).

Ugne Buraciene, Group CEO of payabl., said: “As we enter 2026, the threat of fraud is firmly on the minds of business leaders, and is now actively shaping decisions about growth and even continued operation. 

“Our research shows that many merchants are spending more time, money and energy fighting fraud than ever before, yet still feel exposed and unsupported. Business leaders are willing to invest and take responsibility, but fraud has become too complex and too fast-moving for many to tackle alone. 

“Without stronger coordination between banks, governments, payment providers and online platforms, fraud will continue to dent business confidence and hinder UK economic growth in 2026.”

The findings come amid a rise in business failures. Data from the Insolvency Service shows 25,840 company insolvencies between January and November 2025, with fraud compounding existing pressures.

While 76% of retailers plan to increase investment in fraud prevention this year, most say banks and government must do more to clarify responsibility and support prevention efforts.