The dark — and costly — side of holiday returns
Return fraud during the holidays is a growing problem for retailers—and also an extremely expensive one.
Holiday return fraud is expected to cost retailers $2.2 billion, up from about $1.9 billion last year, according to NRF’s Return Fraud Survey. Retailers estimate that 3.5% of their holiday returns this year will be fraudulent, up slightly from the estimated 3% reported last year.
Retailers surveyed estimate that total annual returns will reach $260.5 billion, or 8% of total retail sales, with $9.1 billion of retailers’ annual returns expected to be fraudulent, or 3.5% of the industry’s total returns.
When it comes to specific instances of return fraud, one problem stands out as the biggest offender: 91.9% of retailers said they have experienced the return of stolen merchandise.
Wardrobing, or the return of used, non-defective merchandise, also presents a unique challenge year after year for retailers: 72.6% of those polled said they have experienced wardrobing in past year, on par with last year.
The survey also found that one-third (33.9%) of those polled said they have experienced return fraud with use of e-receipts, up from 18.2% last year.
The report does offer a glimmer of optimism though. According to the survey, fewer retailers in 2015 have experienced specific instances of return fraud, including:
Additional findings: