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    What is Return Fraud and How to Prevent It

    What is Return Fraud and How to Prevent It

    When bad actors take advantage of return policies, return fraud is the result. It’s the act of defrauding businesses using its return process and it’s a problem in the retail industry.

    If you think fraudulent returns aren’t a problem, think again. American hospitality and retail sectors reported $33.9 billion worth of merchandise was affected in 2019.

    What Is Return Fraud?

    So what exactly is return fraud? Trying to return stolen merchandise for a cash refund qualifies as well as using falsified and/or stolen receipts. Other methods are called price arbitrage and open box fraud. Employees also work scams where workers return stolen merch for a full refund.

    Long story short. It’s the crime of defrauding a retail store through its returns process. Here are some more numbers on the subject. The National Retail Federation reports the number of returns has jumped due to the pandemic. That means return fraud will also increase.

    Why Does Return Fraud Happen?

    People who commit return fraud are abusing a company’s policies. And the returns themselves are increasing. Deloitte expects the rate to hit 10% this year. And there’s increasing pressure on people like Amazon workers to process returns quickly.

    Read more.

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