Retailers are increasingly adjusting their return policies to combat fraud, according to the report, which examined data from over 60 U.S. retailers, the U.S. Census Bureau and a survey Appriss commissioned from Informa TechTarget’s content marketing arm of 150 retail executives and 1,000 consumers.
Some 84% of retail executives said their companies changed return policies in the past year, but it was having adverse implications, per the report.
“It’s clear why retailers want to limit bad actors that exhibit fraudulent and abusive returns behavior, but the reality is that they are finding stricter returns policies are not reducing the returns fraud they face,” Michael Osborne, Appriss Retail CEO, said in a statement. “Our annual research highlights the serious problem of returns fraud, and why an AI-powered, data-driven approach to loss prevention can reduce fraud and keep consumers loyal.”
Several retailers have adjusted their return policies in recent years with an aim at combating excessive returns, including REI, Bath & Body Works and L.L. Bean.
As e-commerce continues to grow, so too has the rate of returned merchandise. While the return rate from in-store sales was 8.7%, the return rate from online sales — which include online sales returned both in-store and online — was 24.5%. Nearly 40% of consumers return at least one item per month that was purchased online, per a separate Narvar survey of over 1,900 consumers.
“Returns are a significant cost for retailers, and the rise of online shopping could increase this trend,” Kevin Mahoney, managing director of retail at Deloitte Consulting, said in a statement. “As retailers implement policies to address this issue, they should avoid negatively affecting customer loyalty and retention. Effective policies should reduce losses for the retailer while minimally impacting the customer experience. This approach can be crucial for long-term success.”
