Geolocation Tech Makes Its Case as Fraud Fighter for Retail

Fraudsters have always had a knack for adapting to the game.

But the latest player on the anti-fraud team isn’t your run-of-the-mill security solution. It’s the same technology that helps companies with location-based marketing and app experiences.

Geolocation technology has matured into a tool capable of tracking not just where devices are, but how the end-user moves, where they’ve been, and whether their online activity raises any red flags.

“Geolocation is central to modern fraud detection across a number of industries,” Radar CEO and co-founder Nick Patrick told PYMNTS. “Understanding any sort of anomalous geolocation data coming from a particular device or inconsistent location data across devices for the same account can help detect fraud and stop bad actors.”

For years, geolocation has been associated with consumer engagement. Think push notifications when entering a mall or personalized messages at a drive-thru. Its evolution into fraud prevention could be a boon for digital security.

“Fraudsters are always going to fraud,” Patrick said. “But with the right tools, businesses can stay one step ahead.”

GPS, WiFi signals and mobile data pinpoint a user’s physical location. Traditionally, companies relied on IP addresses to identify fraud, such as spotting multiple devices logging in from a single IP address or detecting proxy and VPN usage to mask true locations.

However, Patrick highlighted the limitations of these methods, particularly against emerging threats like residential proxy services, which make fraudulent activity appear as if it’s coming from legitimate residential networks.

“Device fingerprinting and IP-based detection are table stakes, but we’re seeing the need for more accurate device-level geolocation,” he said.

“We’re seeing fraudsters move past well-known services like NordVPN and instead use residential proxies,” Patrick added. “We’re also encountering WiFi injection, where devices simulate nearby WiFi networks to trick systems into believing they’re in a specific location.”

To counter these threats, Radar employs hundreds of signals to detect suspicious activity. This includes analyzing mismatches between GPS coordinates and IP-based locations or identifying tampered devices, such as jailbroken iPhones or rooted Android devices. At its core, geolocation fraud detection uses a mix of GPS, WiFi and Bluetooth signals to combat fraud techniques by providing a precise picture of a device’s true location.

“We’re adopting new APIs and capabilities from Apple and Google to ensure that our detection mechanisms are accurate, efficient and privacy-conscious,” Patrick said.

This capability not only enhances accuracy but also opens new avenues for fraud detection and prevention. It’s not just about catching blatant location mismatches, either. Geolocation technology can also analyze patterns to create a multilayered defense that can help sniff out the fraud behind the facade.

Gone are the days when cybercriminals could sneak past systems with stolen credentials or by spoofing IP addresses.

One of Radar’s standout capabilities is its use of accurate jurisdictional polygons. These geometric shapes define specific areas on a map — a critical feature for regulated industries like gaming.

“Polygons can define states, cities or even smaller zones like tribal areas where online gambling might be restricted,” Patrick said. “For non-gaming use cases, we’re using this same technology to geofence malls, drive-thrus or even high schools to prevent underage gambling.”

By integrating these polygons into its software development kit (SDK), Radar allows businesses to implement geolocation rules with minimal technical lift.

“You can integrate the SDK with 10 lines of code or less,” Patrick said.

In retail, some businesses use Radar’s geolocation spoofing detection to maintain fairness during limited-edition product releases. For instance, a customer must visit a specific store to claim an item, but fraudsters often spoof their location to appear eligible from afar.

“They’re using our tools to ensure that shoppers are genuinely near the store before claiming these items,” Patrick said.

In the payments space, geolocation can identify risky transactions and prevent fraud. For example, it can block payments originating from sanctioned countries or areas with high incidences of chargeback disputes.

As geolocation technology becomes more pervasive, privacy concerns are inevitable. Radar positions itself as a data processor, helping its clients comply with regulatory requirements while maintaining end-user privacy.

“In regulated industries like online sports betting, there are extensive geolocation requirements,” Patrick said. “For example, in New Jersey, sportsbooks must adhere to 19 pages of geolocation rules. Meanwhile, nonregulated industries often focus on minimizing the data they collect to comply with privacy laws.”

Radar’s approach includes extensive controls to ensure compliance and data minimization.

“We want to be great partners for our customers,” Patrick said, adding that Radar tailors its solutions to meet diverse use-case requirements without compromising privacy.

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