According to the National Retail Federation’s 2014 Return Fraud Survey USD 3.8 billion will be lost to return fraud this holiday season alone, similar to 2013’s USD 3.4 billion. Overall, retailers polled estimate 5.5% of holiday returns are fraudulent, similar to 2013’s 5.8%.
Findings indicate that nearly all (92.7%) retailers polled have experienced the return of stolen merchandise during 2014, similar to 2013’s 94.8%. In a troubling sign that organized retail crime continues to present significant challenges for retailers, more than three-quarters of those polled (78.2%) say they have experienced return fraud through returns by organized retail crime groups, up from 60.3% in 2013.
Retailers are noticing increasing return fraud instances with e-receipts: the survey found more retailers in 2014 saying they have experienced return fraud with the use of e-receipts (18.2% versus 15.5 % for 2013). Additionally, one-quarter (25.5%) of the retailers surveyed said they have witnessed fraudulent returns using counterfeit receipts, down slightly from 29.3% in 2013; 8 in 10 (81.8%) retailers surveyed report that they have dealt with employee return fraud or collusion with external sources, down from 93.1% in 2013.
When asked about return fraud and the various types of payment methods, 72.7% of those polled said they have witnessed an increase in gift cards/store merchandise credit fraud in 2014. Nearly four in 10 (38.2%) surveyed said they have witnessed an increase in return fraud with the use of credit cards, although 45.5% report no change in fraudulent credit card usage from 2013. Additionally, three in 10 (30.9%) said they have witnessed an increase in debit card fraud.
NRF’s 2014 Return Fraud Survey polled senior loss prevention executives at 60 retail companies in October and November, 2014.
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