'Return fraud' takes big bite out of retailers

Monday, December 28, 2015
Chris Woodward (OneNewsNow.com)

Christmas tree ornamentIt's one of the biggest issues for retailers this time of year, and it's not the cash register ringing.

The annual Christmas season problem is return fraud, which the National Retail Federation says comes in many shapes and sizes.

According to NRF's latest Return Fraud Survey, retailers estimate that 3.5 percent of their holiday returns this year will be fraudulent, costing retailers $2.2 billion. That is up from the estimate of three percent, or $1.9 billion, last year.

Credit card swipe"Return fraud remains a critical issue for retailers with the impact spanning far and wide, in-store and online," said Bob Moraca, NRF vice president of loss prevention.

Technology has helped deter many in-person fraudulent returns, he says, but criminals will always look for loopholes and many of them will find one to exploit.  

When it comes to specific instances of return fraud, one problem stands out as the biggest offender: Nine in 10 retailers surveyed said they have experienced the return of stolen merchandise, similar to last year's findings.

"Wardrobing," or the return of used, non-defective merchandised, also prevents a unique challenge year after year for retailers. Seventy-two percent of retailers polled said they have experienced wardrobing in the past year, mirroring last year's figure of 72.7 percent.

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