Many retailers are tightening their return policies in response some at the expense of customer service. From 2018 to 2019 losses from return fraud rose 35 percent and totaled about 27 billion.
Return Fraud Are You Part Of The Problem
The most common method is for the employee to take merchandise from the store floor and return it using fictitious customer information.
Retail return fraud. Returns fraud continues to pose a serious threat to the retail industry according to the National Retail Federation NRF. Fraudsters having stolen goods will then return them for a refund. Return fraud occurs when you return an item under the false pretense that it was lawfully purchased in an attempt to receive cash or store credit.
Professional return fraud rings are now promoting their services on message boards and elsewhere on the web. Many companies are taking steps to reduce this number seeking to lower the total amount of fraud committed and avoid being defrauded by no-receipt returns and other basic schemes. Merchants are very familiar with returns.
And while the NRF surveyed loss prevention professionals at department stores. Consider for instance the time and money spent on simply processing the return itself restocking returned merchandise reevaluating its worth or determining where how or even if it can be resold. Seamless omni-channel shopping with varied fulfillment routes and convenient wide range of return possibilities retailers must detect suspicious behavior in real-time to protect the bottom line.
For the year the retail industry says it stands to lose 96 billion from fraudulent returns. Other cases involve returning stolen goods for. An example is wardrobing or free renting wherein consumers purchase an item use it and then return it.
In 2017 total merchandise returns accounted for more than 351 billion in lost sales for US retailers. Ultimately at the expense of legitimate customers. The problem has grown along with the rise of e-commerce creating multiple channels for returns that can be difficult for a retailer to manage.
The article also claims that 45 percent of retailers report being victims of criminals who use counterfeit receipts to make returns. Return fraud has become an unfortunate feature of retail with organized criminal gangs in particular seeking to pass themselves off as a genuine returners to extract money from retailers to which they are not entitled. According to a recent study 11 of retailers annual sales will be returned this year and 8 of those returns are likely to be fraudulent.
Return and refund fraud are huge sources of loss for retail companies. You can actually commit return fraud without ever leaving a retail store. Return fraud is one of the types of risk that retail stores are exposed to and it is on the rise.
In a recent study Appriss Retail estimated that out of the 351 billion worth of returned goods in 2017 around 176 billion worth of goods were returned fraudulently. Return fraud is estimated to account for 82 percent of all returns according to 2018 data from the US-based National Retail Federation. Return fraud which by the way includes bringing back used merchandise for a full refund will cost retailers 35 billion this holiday season according to a recent report by the National Retail Federation.
Retail return fraud and abuse is detrimental to sales gross margins inventory management and profitability. Retailers have accepted the reality of returns fraud. Types of Internal Retail Fraud.
Fraudulent returns are a serious concern for retailers. Refund Fraud in thrives in a system that allows refunds to be processed without complete customer information andor a receipt. Return fraud just as the term implies is the act of defrauding a retailer via their return process.
Buying merchandise for short-term use with intent to return such as video cameras for weddings big-screen TVs for a Super Bowl game or a dress for a special occasion is a. A survey by the National Retail Federation estimated that retail return fraud costs all merchants as much as 15 billion in 2017. Return fraud is a growing problem costing US.
According to USA Today return fraud costs retailers a combined total of almost 9 billion a year. Retailers more than 18 billion a year according to Appriss and the National Retail Federation. Return fraud can happen in many different ways but overall it is when someone abuses the return process to gain money or merchandise.
