After you get past the monsters in Bandit's Way, you chase Croco to a dead end and fight him.
Croco uses a regular attack, which you can block after Croco bounces back and becomes stationary. Croco can use a Weird Mushroom, which heals his health by 60 HP. If Mallow knows HP Rain, be sure to use it to heal the party as needed. Mallow can use Thunderbolt, and Mario can use Fire Orb if he knows it, or Jump if he doesn't. In the Nintendo Switch version, the first time you hit him with Fire Orb, it will cause Croco to lose a turn while he douses the tail fire. Croco may sometimes throw bombs.
After you deal enough damage, you get the Frog Coin back. You also get a Flower Tab, which you can save for later. It increases your maximum Flower Points by 1.
There will be a cutscene where you find a Wallet. Afterward, in the Super NES version, you can jump on the spring to instantly go back to the beginning of Bandit's Way, then you can save at the save block, then go northwest from there to return to the Mushroom Kingdom. In the Nintendo Switch version, you can use the Map to instantly go back to the Mushroom Kingdom. You will find that the kingdom is in the midst of an invasion.