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E-Commerce Return Fraud: Four Types, and How Merchants Can Fight Back

March 10, 2022

Organized retail crime (ORC) continues to be a major challenge, with losses averaging over $700,000 per $1 billion in sales in 2020, a trend exacerbated by the pandemic and the shift to digital platforms.

The 2021 holiday season saw nearly 11% of e-commerce returns marked as fraudulent. The National Retail Federation (NRF) notes a 39% increase in fraud due to multichannel sales such as BOPIS (buy online, pick up in-store). Techniques like smishing, phishing, and pharming are on the rise, with some attacks increasing by 700%.

Retailers face chargeback fraud where customers dispute legitimate charges, with average daily claims rising by 19%. Combatting this issue requires investment in advanced identification and POS systems, implementing stricter return policies without harming consumer loyalty, and training employees for better in-store vigilance. Record-keeping is essential for disputing chargebacks. The digital age demands a multipronged approach, combining technology with comprehensive strategy to mitigate these risks.

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About goTRG

goTRG is a leading reverse logistics company that specializes in solving returns. goTRG's connected suite of returns management SaaS, reverse supply chain, and ReCommerce services, under one roof, delivers a true end-to-end solution for returns from initiation through resale. goTRG works with retailers, eCommerce brands, and vendors, to deliver the smartest choices for every touch movement and pricing decision, while also preventing items from unnecessarily ending up in landfills.

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