In 2025, the cyber threat landscape for the retail sector has become scarily big. Cybercriminals are discovering more sophisticated ways to exploit online stores and shoppers alike.
While online shoppers may suffer from fraud scams, online retail and e-commerce stores accrue heavy financial losses, regulatory fines, and irreversible reputational damage due to cyberattacks. By 2029, losses from e-commerce fraud attacks alone are expected to surpass more than $107 billion.
Whether you’re a large and well-known retailer or a small e-commerce business, staying resilient in this cyber threat landscape requires a proactive approach to identify and mitigate online scams before they happen, to protect your customers and preserve your brand’s hard-earned reputation.
To shed light on this, I spoke with Israel Mazin, CEO and co-founder of Memcyco, a real-time digital impersonation protection provider, which specializes in protecting the digital integrity of online stores with an AI-powered solution that prevents customers from falling for phishing scams on spoofed websites.
According to Mazin, cybercrime is more prevalent now than ever. “Organized cybercriminal groups have been especially active in recent years, leveraging sophisticated automated tools and AI to breach retail systems faster, targeting customer credentials and payment data,” Mazin explained.
That said, here are five ways to proactively fight online retail and e-commerce fraud in 2025.
- Mitigate phishing with AI-powered monitoring tools
“For retailers, one of the biggest threats year round is brand impersonation based on phishing messages,” continued Mazin. “Fraudsters create lookalike websites impersonating trusted brands to lure customers into making purchases that either deliver nothing or harvest personal information.”
Cyber criminals now have more advanced tools and systems that help them create convincing “fake websites” and ads built to deceive customers. Some criminals even create fake websites to sell illegitimate gift cards and coupon codes to shoppers.
One way to combat these threats is with AI-powered monitoring tools that rapidly identify the emergence of spoofed websites. Such tools help retailers and e-commerce brands detect and preemptively prevent phishing scams before they reach their customers by identifying site impersonation attempts, suspicious device activity, unusual user behaviour, and more.
By continuously scanning, AI tools can swiftly detect fake websites impersonating trusted brands, enabling prompt action to remove the threats. Additionally, AI-driven solutions can scrutinize promotional offers and communications, flagging dangerous offers.
- Tackling credential harvesting
Another major problem in the retail industry is credential stuffing and credential harvesting attacks, which are consequences of a successful phishing attack. “Fraudsters use customer account credentials obtained from phishing schemes to take over accounts with various stores by logging in with ‘reused’ credentials. Once inside, they often purchase high-value items to ship to different addresses or steal loyalty points for resale,” said Mazin.
As Mazin further explains: “Financially motivated attackers also leverage botnets to conduct loyalty program fraud, exploiting vulnerabilities in reward systems to steal points or redeem them for goods. Additionally, we have seen an increase in social engineering attacks by fraudsters posing as customer service agents to gather personal information from unsuspecting consumers. Another rising trend is the use of ransomware by cyber gangs targeting smaller retailers with fewer security resources, aiming to disrupt operations and demand payment.”
To combat these issues, online stores must adopt a multi-layered approach to authenticating and validating customers and users. Implementing multi-factor authentication into shopping apps and websites is an excellent first step. By adding an extra layer of security beyond passwords, MFA reduces the risk of criminals breaking into accounts with limited information.
AI-powered tools can also help strengthen defenses by assisting companies with identifying suspicious login attempts – such as those from unusual IP addresses, or accounts demonstrating unusual, automated behavior.
- Securing payment gateways and POS
Securing payment gateways and point of sale (POS) systems is another key step in preventing fraud, scams, and protecting customer data.
“When it comes to physical stores, one of the most prevalent threats is point-of-sale (POS) malware that targets payment systems to steal card information. Attackers often gain access to POS systems by exploiting vulnerabilities in the store’s network, installing malware that records card data during transactions, whether it’s swiped, scanned, or inserted into the terminal,” explained Mazin.
With online retail and e-commerce stores, payment gateways can be subject to man-in-the-middle attacks and customers can frequently be tricked by “fake” gateways built into “lookalike” stores that are used to collect payment data at scale.
To address these issues, retailers need to implement secure payment gateways with end-to-end encryption to protect sensitive data. Investing in real-time fraud detection tools can help businesses identify unusual activities across POS systems and ecommerce platforms, too, by constantly monitoring for anomalies and issues.
Moreover, all retail leaders should be conducting regular security audits and making timely updates to software and hardware to identify and patch vulnerabilities before they’re exploited by bad actors.
- Protecting business networks
In an increasingly connected retail environment, protecting business networks is essential to prevent breaches and limit their impact. If a cyber criminal gains access to one part of a network, there’s a risk that they could use technology to extract more critical data “from within”.
As Mazin explains, “Network segmentation can effectively isolate critical systems, minimizing the impact of a breach, while rate limiting on sensitive actions prevents automated attacks from causing damage. By combining these measures, retailers can create a comprehensive and resilient security framework that helps mitigate cyber threats.”
Network segmentation involves dividing a network into isolated zones, ensuring that critical systems such as payment gateways, POS systems, and customer databases remain protected even if one segment is compromised. By preventing attackers from moving laterally across the network, segmentation reduces the scope and damage of an attack.
Rate limiting on sensitive actions like log-in attempts and data transfers can also help minimize the risk of automated attacks like credential stuffing and botnet-based fraud.
- Taking a data-driven approach to continuous improvement
As e-commerce and retail threats continue to evolve, a one-time approach to updating security is no longer enough. Business leaders need to take a continuous, data-driven approach to security optimization. By gathering insights from real-time monitoring, incident analyses, and customer behavior, security teams can better understand evolving threats and adapt defences.
Data collected from fraud detection tools, network traffic analysis, and transaction logs can reveal patterns and anomalies that signal emerging vulnerabilities or active threats. For example, unusual login attempts, suspicious payment activity, or repeated failed authentications can point to credential harvesting, phishing, or automated attacks. These insights allow security teams to identify weak spots and refine their strategies proactively.
By investing in a strategy for continuous improvement, retailers can stay agile, closing security gaps before they are exploited. This iterative process not only enhances defenses but also helps maintain customer trust and protect long-term business success in an ever-changing digital landscape.
Building resilience against online retail and e-commerce threats
As the cyber threat landscape continues to evolve, online retailers and e-commerce businesses need to make it a priority to proactively defend their data, their systems, and their customers. It’s not just about keeping data breaches to a minimum for compliance purposes. Your approach to security influences your organization’s ability to ensure long-term growth and maintain customer loyalty.
Building resilience is about more than just defence, it’s about safeguarding your brand’s reputation, maintaining customer trust, and giving yourself the power to grow in the years ahead.
