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BizReport : Ecommerce archives : January 02, 2014

Return fraud may cost retailers

The 2013 holiday shopping season may have seen retailers earn 10% more than in 2012, but return fraud may still cost them. According to a survey by the National Retailer Federation return fraud could cost retailers $3 billion; nearly $9 billion in return fraud can be expected for the year as a whole.

by Kristina Knight

Nearly all businesses say they've experienced return fraud based on in-store buys - or theft - while just over 15% say they've experienced e-receipt return fraud as well.

According to the NRF survey:

• 9.4% of retailers have experienced the return of stolen items over the past year
• 69% of retailers say they've experienced item returns purchased on stolen/fraudulent tender
• 29% say people use counterfeit receipts for returns
• 93% say they've experience employee return fraud
• 49% say they've seen an increase in gift card/store merchandise credit fraud

"While coverage of this issue paints return fraud as one of the 'less severe' retail crimes, the fact of the matter is that returning used or stolen items, or even using false tender to purchase items is fraud, period," said NRF Vice President of Loss Prevention Rich Mellor. "Recent efforts to combat fraudulent activity are slowly starting to work, but criminals are becoming more savvy and technologically advanced in their methods, making it even more difficult for retailers and law enforcement to keep up with the growing problem."

To deal with the increase in return fraud, retailers are requiring receipts (73%) to process returns while 12% require those returning items to show their identification.

Tags: ecommerce trends, National Retail Federation, retail return fraud, return fraud

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