US retailers face the challenge of increased fraudulent returns

American retailers are contending with higher rates of bogus returns, with fraudsters sending back brick-filled boxes in some cases, the Wall Street Journal reported last week. 2023 saw some USD 100 bn in goods returned fraudulently in the US, accounting for 13.7% of all returned goods that year and more than twice the rate seen in 2020, according to figures tracked by the National Retail Federation (NRF). Retailers expect to receive returns valued at USD 148 bn for purchases made during the holiday season — accounting for 15% of total purchases — with 17% of those returns expected to be fraudulent, the NRF says. Fraudsters are making use of hasslefree online returns and other policies rolled out by retailers to draw in buyers as e-commerce surged during the pandemic, with those strategies leading to a sharp uptick in return rates, the WSJ said.

What’s the solution? Retailers are trying to rein in bogus rates by encouraging shoppers to bring back returns to stores where they can be examined on the spot. In-store returns result in “much, much, much lower fraud,” that mail-in returns, WSJ cites Inmar Intelligence general manager of supply chain solutions Thomas Borders as saying.