Dive Brief:
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Return fraud increased 2.6% over last year to $9 billion, according to a report by the National Retail Federation's annual survey on returns. The total cost of lost sales due to merchandise returns was almost $270 billion.
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Returns without receipt are 15% of all returns, but any type of return is vulnerable to fraud, the report said.
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Most retailers allow in-store returns of merchandise bought online, but about 4.2% of those returns are fraudulent, according to the survey.
(Source: National Retail Federation)
Dive Insight:
U.S. retailers have long had forgiving and in some cases extremely lenient return policies. Some, like L.L. Bean and Nordstrom, have built their reputations on accepting returns of discontinued and even well-worn merchandise. But most retailers are trying to find the sweet spot between allowing customers to change their minds or return a gift and getting taken for a ride. This survey shows that there’s a need to keep a keener eye on fraudulent returns by ensuring that employees are well trained, and that receipts and customer identification are well noted, among other tactics.