{"id":4961,"date":"2023-04-06T08:37:51","date_gmt":"2023-04-06T08:37:51","guid":{"rendered":"https:\/\/ccbill.com\/kb\/?p=4961"},"modified":"2023-05-11T11:35:15","modified_gmt":"2023-05-11T11:35:15","slug":"return-fraud","status":"publish","type":"post","link":"https:\/\/ccbill.com\/kb\/return-fraud","title":{"rendered":"What Is Return Fraud?"},"content":{"rendered":"\n

Introduction<\/p>\n\n\n\n

Returns are inevitable in any ecommerce business<\/a>, and merchants will regularly encounter customers who want to return purchased items for a variety of valid reasons. However, some people resort to return fraud to deceive merchants<\/a> for their own gain.<\/p>\n\n\n\n

In this article, learn about return fraud, how to recognize it, and how to prevent its negative impact on your business and profits.<\/p>\n\n\n\n

\"What<\/figure>\n\n\n\n
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What Is Return Fraud?<\/h2>\n\n\n\n

Return fraud happens when a customer returns an item and requests a refund in violation of the merchant\u2019s return policy<\/a>.<\/p>\n\n\n\n

Examples of return fraud include returning items purchased from another merchant online or in-store<\/a>, returning used or stolen items, or forging receipts to make a return. Return fraud is a type of friendly fraud<\/a>, since it is committed by a legitimate cardholder who purchases the items rather than a third party.<\/p>\n\n\n\n

Return fraud is difficult to detect since there is no guaranteed way of establishing if the customer\u2019s reasons for a return are valid or not. Ultimately, merchants will frequently proceed with a refund to avoid alienating customers and prevent a chargeback<\/a>.<\/p>\n\n\n\n

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Note:<\/strong> Frequent refunds can be frustrating but inevitable and a vital element of the customer experience. Learn more about how to handle refunds in our article How to Respond to a Refund Request?<\/a><\/p>\n\n\n\n

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What Is the Cost of Return Fraud?<\/h2>\n\n\n\n
\"Cost<\/figure>\n\n\n\n

According to the National Retail Federation (NRF), for every $100<\/a> in returned items, merchants lose $10.40 to return fraud.<\/p>\n\n\n\n

Online return rates have decreased from 20.8% in 2021 to 16.5% in 2022 thanks to a proactive response by merchants who understand the need to clearly display their return policies. In 2022, out of $212 billion in online returns, only 10% was estimated to be fraudulent.<\/p>\n\n\n\n

Return rates typically increase by 25% during the holidays. This is the time when merchants should be particularly vigilant and monitor their returns.<\/p>\n\n\n\n

Types of Return Fraud<\/h2>\n\n\n\n

Here is a list of the most common return fraud tactics used by customers.<\/p>\n\n\n\n