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Five ways to tackle return fraud

April 24, 2024

Sender Shamiss, CEO of goTRG, outlines strategies for retailers to combat increasing return fraud. Mr. Shamiss highlights that while events like the Super Bowl boost consumer spending, they also see a spike in fraudulent return activities, including the practice of "wardrobing" where consumers buy items like TVs for the event and return them afterwards. He notes a significant increase in this trend, with post-Super Bowl TV returns rising by 36%.

Shamiss details the broader context of return fraud, reporting a record $101 billion in fraudulent returns in the past year despite a general decline in overall retail returns. He points out that return fraud is becoming a more pressing issue, with 68.43% of businesses recognizing an increase in fraud.

To protect against these frauds, Shamiss offers five recommendations:

  1. Identify Potential Return Fraud: Retailers should monitor for red flags such as unusual return patterns and suspicious customer data.
  2. Use Returns Management Software: Implement advanced software that integrates with point-of-sale systems to track returns and identify fraud.
  3. Work with a Refurbishment Partner: Collaborate with partners to inspect returned items for signs of theft or misuse.
  4. Implement Effective Return Policies: Introduce stricter return policies, including restocking fees and receipt requirements.
  5. Recognize the Role of Employees: Train employees to detect and manage fraudulent returns effectively.

Shamiss emphasizes the necessity for robust retail strategies to safeguard against return fraud, particularly during high sales periods like the Super Bowl and the winter holiday season. This approach not only prevents losses but also maintains the integrity of retail operations.

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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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