Executive Briefings

Retailers Experience Slight Rise in Fraudulent Returns for 2014 Holiday Season

Retailers estimate that they will lose $3.8bn to return fraud for the 2014 holiday season, up from last year's $3.4bn estimate, according to a recent National Retail Federation (NRF) survey. Retailers also estimated that 5.5 percent of all holiday returns are fraudulent, similar to last year's 5.8 percent.

"Today's sophisticated technology does well keeping criminals at arm's length but often isn't enough to completely stop the unethical practices of organized and individual retail fraud occurrences," said Bob Moraca, NRF vice president of loss prevention. "Return fraud has become an unfortunate trend in retail, thanks to thieves taking advantage of retailers' return policies to benefit from the cash or store credit they don't deserve."

Many of the return fraud cases result from "larger, more experienced" crime rings, Moraca added.

While return fraud reigns during the holiday season, it also plagues retailers year-round. Nearly all (92.7 percent) of the retailers polled say they have experienced the return of stolen merchandise in the last year, similar to last year's 94.8 percent.

And, 78.2 percent of retailers say they have experienced return fraud through returns by organized retail crime groups, a spike from 60.3 percent last year.

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"Today's sophisticated technology does well keeping criminals at arm's length but often isn't enough to completely stop the unethical practices of organized and individual retail fraud occurrences," said Bob Moraca, NRF vice president of loss prevention. "Return fraud has become an unfortunate trend in retail, thanks to thieves taking advantage of retailers' return policies to benefit from the cash or store credit they don't deserve."

Many of the return fraud cases result from "larger, more experienced" crime rings, Moraca added.

While return fraud reigns during the holiday season, it also plagues retailers year-round. Nearly all (92.7 percent) of the retailers polled say they have experienced the return of stolen merchandise in the last year, similar to last year's 94.8 percent.

And, 78.2 percent of retailers say they have experienced return fraud through returns by organized retail crime groups, a spike from 60.3 percent last year.

Read Full Article