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Five Ways That Returns Fraud Is Costing Retailers Money

Published: 
February 15, 2024

In this article written by Sender Shamiss, CEO and co-founder of goTRG, Mr. Shamiss offers valuable insights into the escalating challenge of retail return fraud, which has recently soared to a staggering $101 billion in losses. Mr. Shamiss outlines the growing problem, noting that fraudulent returns now account for an average of 3.7% of retailer revenues. The shift to online shopping during the pandemic has amplified these issues, with return rates reaching 17.6% of online purchases in 2023.

Mr. Shamiss details prevalent fraudulent tactics such as "wardrobing," where customers return items after use, and "bracketing," where multiple sizes are ordered and all but one are returned. These practices have significant financial and environmental impacts, contributing to billions in lost sales and substantial waste. The BOPIS trend has also been manipulated by fraudsters using stolen card data or exploiting system lags during order cancellations.

To counter these schemes, Mr. Shamiss emphasizes the importance of advanced returns management software, strict return policies, and employee training. By adopting these measures, retailers can better safeguard against the multi-billion-dollar issue of returns fraud, maintaining the market's integrity and consumer trust.

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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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