NRF Says Return Fraud Could Cost Retailers $2.9 Billion This Holiday Season

Dec 06, 2012 12:32 AM  By

A National Retail Federation survey report had found that the retail industry will lose $2.9 billion in return fraud during the 2012 holiday shopping season and $8.9 billion this year.

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The 2012 Return Fraud Survey, which was conducted with loss prevention executives at 60 retail companies, found that 96.5% of those polled experienced the return of stolen merchandise in the last year, and 84.2% experienced the return of merchandise purchased on fraudulent or stolen tender.

Overall, retailers estimate 4.6% of holiday returns will be fraudulent.
The NRF is defining retail fraud as the act when “criminals” return stolen merchandise, use counterfeit receipts, or return used that are not defective. But with an ever increasing amount of shopping being conducted online, retailers are beginning to see a trend of electronic receipt fraud. According to the results, 19.3% of respondents said they have dealt with e-receipt return fraud.

“As online sales continue to grow, 86% say they allow customers to return merchandise purchased online in their stores, and retailers estimate 3.9% of those returns are fraudulent,” a press release said.

“Return fraud in any form is a serious threat, and we know that retailers have made significant strides in their fight against retail crime, and are continuing their efforts working with law enforcement to address this multi-billion dollar problem,” said NRF Vice President of Loss Prevention Rich Mellor.

When it comes to the respondents holiday return policy, according to the results, 83.1% said their return policies will remain unchanged compared to last holiday season, and 10.2% said they will actually loosen their policies to help ease the process for gift givers and recipients.

Erin Lynch is the associate editor at Multichannel Merchant. Erin can be by emailing her at erin@multichannelmerchant.com. You can also follow her on Twitter at @LynchMCM or on LinkedIn.