However, small businesses do have some fraud-fighting advantages, says Yaniv Chechik, a vice president at Zooz, a payment technology provider. For example, he says most small businesses don't store your data the way larger companies do.
Protect yourself shopping with mom and pop
Whenever you shop in a mom and pop store or spend money with any other kind of brick-and-mortar small business, you must rely on your intuition to gauge your vulnerability to fraud.
"Follow your gut instinct," says Kaiser. "If you're in the doctor's office, are files lying around, or are they being put away immediately? I also encourage people to just ask about what precautions are being taken with their personal information."
Beware of businesses that don't use an electronic terminal for credit card transactions or who write down your credit card number, Chechik says. They're putting you at risk.
Consumers are particularly vulnerable if they are asked to send credit card information via email or text, Edenhofer warns. He also recommends that you use a prepaid debit card or a credit card you designate just for shopping at small businesses, rather than using your bank debit card, in order to limit your exposure if your account information is stolen.
Be careful with smaller online businesses
Online shoppers at the checkout for a small business's website should always make sure that the URL starts with "https." Or, look for the "SSL Secure" label or the lock symbol on your browser, which indicate a secure site, says Kaiser.
Another good idea is to research reviews of unfamiliar sites to see if consumers have complained about a data breach.
"If you're not sure you're dealing with a legitimate business, look up the physical address and check it out on the Google Earth website," says Edenhofer. "You can also go to WhoIs.com with the URL of the site and find out how long the website has been in existence and any other information that's available."
Be smart with passwords, too
A major no-no is to register on the website of a smaller company with the same password you use for your bank account, says Edenhofer.
"If that password is stolen, a hacker will try it out on all your other accounts," he says. "If you want to designate a generic password that you use for shopping at all other sites, that's fine as long as there's nothing to connect it to your important passwords."
Chechik adds that you should also avoid using your email password for any other site, because if a fraudster accesses your password, you are vulnerable to identity theft based on information that can be gathered from your emails.
No matter where you shop, watch for red flags that indicate your personal information is not being protected, and always monitor your own credit report and accounts.
"Consumers can't entirely eliminate the risk of identity theft or financial fraud," says Kaiser. "Just use your instincts and don't give away information if you don't have to."