Returns scammers to cost retailers billions over holiday period

According to the results of a survey released this week by the National Retail Federation, retailers estimate that losses from return fraud will cost them $3.8 billion this holiday season, which is slightly higher than last year’s $3.4 billion. The NRF 2014 Return Fraud Survey, which was completed by loss prevention executives at 60 different retail companies, also found that the industry will lose close to $11 billion overall to return fraud this year alone.


Key findings

  • Retailers polled estimate 5.5 percent of holiday returns are fraudulent.
  • 92.7 percent of the retailers polled say they have experienced the return of stolen merchandise in the last year.
  • Most worrying, more than three-quarters of those surveyed (78.2 percent) also reported that they have experienced return fraud through returns by organized retail crime groups, up from 60.3 percent last year
  • Retailers estimate that 14.1 percent of the returns made throughout the year without a receipt are fraudulent.
  • 81.8 percent of retailers surveyed report that they’ve dealt with employee return fraud or collusion with external sources

refind receipt

Retailers in recent years have had to loosen return policies to ease one of the most frustrating parts of shopping and win customers from rivals, by making it easier to get a return without a receipt and easing conditions. But that left an entry point for crooks. “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,” said NRF Vice President of Loss Prevention Bob Moraca.


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