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BizReport : Ecommerce archives : January 05, 2015

NRF: Holiday return fraud could cost $3.8b

While the 2014 holiday shopping season was a strong one for retailers across the US, the National Retail Federation is reporting holiday return fraud could cost retailers upwards of $4 billion. Their annual survey indicates fraudulent returns could cost $10.9 billion for the year while return fraud over the holidays could reach as high as $3.8 billion.

by Kristina Knight

According to the National Retail Federation survey retailers report that just over 5% of returns over the holiday season are fraudulent. The survey also found that most (92.7%) retailers say they've experienced shoppers returning stolen goods; about three-quarters (78.2%) say they've experienced fraudulent returns from 'organized retail crime groups'. Finally, retailers report they've seen more people returning goods that were purchased with either fraudulent or stolen credit cards/payment methods (81%).

"Today's sophisticated technology does well keeping criminals at arm's length but often isn't enough to completely stop the unethical practices of organized and individual retail fraud occurrences," said NRF Vice President of Loss Prevention Bob Moraca. "Return fraud has become an unfortunate trend in retail thanks to thieves taking advantage of retailers' return policies to benefit from the cash or store credit they don't deserve. Additionally, many of these return fraud instances are a direct result of larger, more experienced crime rings that continue to pose serious threats to retailers' operations and their bottom lines."

Meanwhile, comScore is reporting that the final week of Christmas sales increased 15% (desktop spending) to reach $48.3 billion for the 2014 holiday shopping season. Six individual days surpassed the $1 billion ecommerce spending mark during the season.

Image via Shutterstock

Tags: 2014 holiday shopping trends, comScore, ecommerce, ecommerce trends, National Retail Federation, retail return fraud, retail trends

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