Return fraud will cost retailers USD 3 bln in 2012 holiday season

According to the National Retail Federation, sellers will miss out on USD 2.9 billion because of return fraud, estimating that 4.6 percent of holiday returns will be fraudulent. Overall, merchants are expected to lose USD 8.9 billion in 2012, when shoppers return non-defective items after wearing or using them, when buyers return products with counterfeit receipts and when consumers return stolen merchandise.

Retailers have declared that returning clothing after it’s been worn, is a major problem. Data shows that more than 64 percent of merchants have experienced this.

Results point out that receipt fraud is also common among sellers, with about 45.6 percent of retailers saying customers have tried to return items to them using a counterfeit receipt. It’s even happened with electronic receipts. Almost 20 percent of merchants have stated they have dealt with receipt fraud.

Furthermore, with the growth of online sales, 86 percent of brick-and-mortar shops that have an online presence say they allow shoppers to returns items they bought online in their stores. According to the National Retail Federation, about 3.9 percent of those returns are fraudulent.

But despite the projected losses, more than 80 percent of respondents mentioned they will keep the return policies they have used last holiday season. About 10.2 percent say they will make their policies less strict to attract more shoppers.