In this highly competitive world great customer service is vital to your business. Today’s customers expect a great experience and being treated as a King. Great customer service typically comes down to four key components

• Don’t Make Your Customers Wait
• Transaction Transparency
• Help Them Help You
• Build Trust and They Will Come (Back)

A central part of this is a retailer’s returns policy. The return—that moment when the customer effectively tells the store that the sales transaction was a failure, that they found something better, or a better price—is a true test of the retailer. When they fail, shoppers feel tricked, and business suffers. Retailers understand this and have responded by opening up their returns policies. But this comes at a risk of opening the door to higher levels of fraud.

The National Retail Federation estimates that retailers lost $9.1 billion to return fraud in 2013. The dollar amount of fraud increased almost 3 percent over 2012. In both years, 3.4 percent of returns were thought to be fraudulent.

The most common form of return fraud is the return of stolen merchandise. Other forms of return fraud include employee fraud, return of items bought with a stolen credit card or other fraudulent means of payment, and retail fraud committed by organized crime groups. The return of already used merchandise, called “wardrobing”, was reported by over half of all retailers. This is where the merchandise is purchased for a single event, used and returned.

Our advice to retailers on returns fraud.

• Correlate a return to a specific transaction. Never take a return not knowing its original origin.
• Look for correctional between the operator of the return and the original transaction. Repeated matches indicate collusion.
• Insist the packaging is intact and tags remain on the items.
• Insist that the original receipt is provided and retained as part of the return.
• Also refund using the same method as the original transaction and for credit cards, only to the card that was originally used
• For a return that is missing the receipt or the packaging isn’t intact, provide a store credit.

Having a customer friendly returns policy doesn’t have to open your business up to fraud.