Return fraud cost U.S. retailers
billions of dollars during the holiday season in various forms,
according to an industry survey report released on Tuesday.
The National Retailer Federation (NRF) found the industry may
lose 2.9 billion U.S. dollars to return fraud in November and
December when Thanksgiving Day and Christmas Day take place, and 8.
9 billion dollars in the whole year, after surveying executives at
60 retail companies. Overall, retailers estimated 4.6 percent of
holiday returns were fraudulent.
Return fraud may be in the form of criminals who return stolen
merchandise, use counterfeit receipts, or even return items already
worn or used that are not defective. NRF Vice President of Loss
Prevention Rich Mellor noted that "innocent consumers often suffer
because companies have to look for ways to prevent and detect all
types of crime and fraud in their stores, oftentimes resorting to
shorter return windows and limitations on the types of products that
can be returned."
According to the survey, wardrobing, which means the return of
used, non-defective merchandise like special occasion apparel and
certain electronics, is a huge issue, with 64.9 percent of retailers
saying they have been victims of this activity in the past year.
When it comes to holiday return policy, 83.1 percent of
respondents from discount stores, department stores, drug stores,
supermarkets and specialty stores said they won't change the
existing policies.
