The growing issue of return fraud in the retail sector is becoming more problematic due to policies that allow customers to keep their returned items. Retailers are facing a significant challenge, as fraudulent returns are projected to cost $24.5 billion out of $148 billion in total returns following the 2023 holiday season. This surge in fraud is partly fueled by online shopping, where fraudulent shoppers claim merchandise was never received, return stolen goods, or send back different items. Despite a positive performance in both in-store and online holiday sales, major retailers like Walmart and Amazon are losing millions due to such fraudulent activities. In response retailers are beginning to implement stricter return policies, including shortening return windows and introducing return fees, to maintain profitability and competitive pricing, according to a forecast by goTRG. However, there's speculation that these stricter policies may not last, as market conditions and retailer strategies continue to evolve.
