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Retailers claim $100B loss from return fraud in 2023

  • Stores took back $743 billion in returns last year
  • Return fraud can happen at stores or via mail
  • ‘Open box fraud’ is one of the most difficult to prevent

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(NewsNation) — A wave of fraudulent returns is hitting retailers all across the country, costing them billions, according to retailer data.

Stores took back $743 billion in returns last year, more than $100 billion of which was returned fraudulently, according to the National Retail Federation.

You might be wondering how someone can return something fraudulently. Well, the scam has many different forms. It can be done by changing the price on a tag, faking a receipt or open box fraud — returning something you already bought, then buying it for a discount since it’s an open box.

The most common fraud, however, comes in the form of shipping back returns. But what’s in the box? Not the item. According to a Wall Street Journal report, electronic retailers say they’ve received entire TV boxes filled with bricks.

Christian Piller, an expert in supply chain strategy, told “NewsNation Now” that fraudulent returns are a product of growth.

“I think the challenge is e-commerce is continuing to grow. Therefore, returns and online returns fraud are continuing to grow,” he said. “Most of the retailers focus their effort on stores, but in fact, returns are a much bigger, fraudulent problem.”

And it’s a problem Piller believes is only likely to grow.

“If we look at what’s going to happen in 2028, where U.S. e-commerce is expected to be a $2 trillion industry, if retailers don’t start doing something now to reduce returns and reduce fraud or combat fraud, they’re going to have a much bigger problem now than they do now.”

Business

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