January 19, 2026
Retail Fraud Forces Tough Decisions for UK Businesses Ahead of 2026
Fraud is forcing UK retailers to make practical, sometimes painful decisions about how they operate. This can mean closing physical stores, cutting back online services, tightening refund and return policies, or putting planned investments on hold. In the most serious cases, it means questioning whether the business can continue at all beyond 2026.
New research from European fintech provider payabl. shows that 48% of UK retail leaders have already considered closing their business or scaling back operations because of fraud. The findings come from payabl.’s Fraud in Europe report, which looks at how fraud affects day-to-day operations, margins, and customer trust.
Fraud is creating direct financial pressure on retailers, not just through isolated incidents but through losses that affect everyday operations. According to UK Finance, fraud cost UK businesses £1.17 billion in 2024, and 36% of retailers say they have lost revenue as a result. Those losses then force businesses to cut costs elsewhere, often by reducing staff hours, scaling back customer service, or delaying expansion plans.
Fraud Is Damaging CX
Fraud also pushes retailers to make changes that directly affect the customer experience. Over half of retailers, 52%, say fraud has damaged their brand’s reputation. Among larger retailers, that figure reaches 67%. When fraud leads to delayed refunds, cancelled orders, or stricter checks, customers often feel the consequences, even if the retailer is not at fault.
Customer loyalty is also under strain, with 21% of retailers saying fraud and scams have already reduced repeat business. Problems such as friendly fraud, where customers dispute legitimate charges or abuse refund policies, are pushing retailers to rethink how generous they can afford to be. Easy returns and fast refunds, once used to attract and retain customers, are now being reviewed or restricted as businesses try to limit further abuse.
Behind these changes are retail leaders carrying growing responsibility. A total of 84% say they feel personally responsible for preventing fraud within their business. Nearly 75% say they now spend more time and resources dealing with fraud than they did a year ago. This often means less focus on improving stores, upgrading digital journeys, or launching new services.
Insolvencies Are Climbing
These decisions come at a time when many UK businesses are already under pressure. Insolvency Service data shows 25,840 company insolvencies between January and November 2025, highlighting how limited the margin for error has become. Against that backdrop, fraud adds another risk that can push already stretched retailers into scaling back or shutting down.
That pressure helps explain why most retailers now treat fraud prevention as a business priority rather than a security task. The research shows that 87% believe tackling fraud is critical to long-term survival, and 76% plan to increase spending on fraud prevention over the next 12 months. Even so, many retailers say higher investment alone will not solve the problem.
Retailers say that responsibility needs to be shared with the banks and the government. A total of 88% say banks must take stronger action to prevent fraud, while 84% believe the government needs to clearly define who is responsible for tackling it. Without clearer rules and better cooperation, retailers expect to keep absorbing the cost and risk themselves.
