Fraud

A package shows up at your door. Or at least, that’s what the tracking data says. The customer says otherwise — and files a claim for a full refund. The item was real, the delivery was confirmed, and the money is gone anyway. That’s just one example of return abuse, which cost retailers $100 billion last year. The word “abuse” does a lot of softening work. These are not edge cases or honest mistakes. Wardrobing, false Item Not Received (INR) claims, double-dipping: These are deliberate acts of fraud by customers who have calculated that the system will let them get away with it. And for the most part, they’re right. How Widespread Has Return Policy Abuse Become? The scale is harder to dismiss than it used to be. Data from Forter’s consumer survey about return policy abuse shows that 52% of U.K. consumers and 45% of U.S. consumers admitted to abuse in the last 12 months. Those are self-reported numbers; the real figures are almost certainly higher. The behaviors behind those numbers vary, but none of them are ambiguous:

• Wardrobing: 30% of consumers admit to buying an item to wear or use once, then returning it.
• Bracket buying: 21% over-order to qualify for free shipping, then return what they don’t want.
• Try-before-you-buy abuse: 18% use bulk purchasing as a de facto trial program, with no intention of keeping most of what they order.

And 68% of consumers said merchants make it easy to abuse their return policies. That’s a signal that current policies aren’t working. Double-Dipping Fraud Doesn’t Help False INR claims have become one of the most common (and costly) forms of abuse. The customer claims a package never arrived, receives a refund or replacement, and keeps the original item. INR claims increased 30% year-over-year from 2023 through 2025. Double-dipping takes the same logic a step further. Rather than filing a claim with the retailer alone, the customer also submits a chargeback to their bank for the same order, collecting twice on a single transaction. Double-dipping has grown significantly over the past few years. In the ticketing, events, and QSR verticals, double-dipping rose 50% year-over-year and now represents roughly 10% of all claims. That is no longer a rounding error. The more popular double-dipping gets in its kickoff verticals, the more likely it is to spread to other industries. The good news is, merchants don’t need to stand for it. And they shouldn’t. The data you need to protect your business from losing out significantly to this trend is all in your hands already. You have a wealth of data about your customers’ past buying history, habits, and behaviors. You know who cheats and who cheats often. Curb Return Policy Abuse Once you understand who’s cheating, you can calculate their financial impact. Forter’s new return abuse guide walks you through how to quantify your true cost of abuse with an assessment that uncovers the hidden costs and how much revenue you can recoup. Check it out here. The post Return Policy Abuse Is Theft. It’s Time to Treat It That Way. appeared first on Forter.

Source: https://www.forter.com/blog/returns-abu ... bles-down/