Data has revealed that nine out of 10 (91%) of UK retailers have experienced an increase in the rate of returns fraud or policy abuse in the past 12 months and almost half (55%) believe shoppers do it to improve their own financial situation, according to the latest industry data report.
It also revealed that retailers identify fraud (64%) as currently delivering the biggest headache to their business and policy abuse (49%) coming in second. High operational costs (37%) follows in third place, with supply chain disruptions (22%) and growing advertising costs (14%) fourth.
Additional key findings from the report include:
- Customers trying to return items that weren’t eligible for a return (51%) was the most common type of fraud/policy abuse companies experienced in the past 12 months, followed by quality disputes (45%) and wardrobing (35%), where a customer returns an item after they’ve worn it.
- 96% of respondents agree their company is taking this rise in returns fraud and policy abuse seriously. However, less than half of respondents (44%) rate their company’s detection and prevention measures as very effective.
- A majority (53%) of respondents say their company prioritises customer experience over fraud and abuse prevention.
- Tightened return policies (59%), offering store credit or exchange (42%) and implementing return fees (39%) are the most common actions taken in response to returns fraud or policy abuse.
The data highlights that for every £78.31 in returned merchandise, retailers lose £8.15 to returns fraud.
Consequences for the crime have also not been supportive of this either, police did not respond to 71% of series retail crimes in 2023 according to a freedom of information request made by Co-op last year.
