Analyst Insight: Combatting losses caused by fraudulent returns is a growing problem for retailers and consumer brands, with concerning signs that issues are likely to become more widespread and complex in 2026.

A look at what’s happening in mature e-commerce markets, which have established returns policies, reveals the growing problem of returns fraud. In the U.S., industry reports from Deloitte and the National Retail Federation suggest that 9% to 15% of returns were fraudulent during 2024 and 2025, costing businesses billions of dollars.

U.K.-based fraud prevention service Cifas reports that 17% of adults don’t think it’s illegal to fraudulently claim a retail refund, while 35% of 16- to 24-year-olds admitted they’d be willing to lie to get a refund. Similar issues of returns and refund abuse exist in Germany. Ravelin’s Global Fraud Trends report highlights that refund abuse rose from 53% last year to 57% in 2025.

Returns service providers are increasingly dedicating resources and innovation to helping retailers and brands to tackle fraudulent returns. The issue is becoming so problematic, that “refund and returns policy abuse” has been deemed by the global Merchant Risk Council as the most prevalent fraud type facing merchants such as online retailers.  

There are a series of factors causing returns fraud to become more complex and widespread. Wardrobing – where a consumer uses a product and sends it back – is being pushed to the extreme. Influencer culture is contributing to this, while tough economic conditions squeezing personal finances are also playing a part. Consumers feel pressure to wear the latest fashions and not to repeat outfits, but this isn’t always affordable. Wardrobing is seen as the answer, and it’s becoming more commonplace. 

Economic downturns can further impact returns fraud, because financial hardship helps people to rationalize their deception. Cash-strapped individuals are more motivated to claim a disingenuous refund and will justify such action as a victimless crime. E-commerce can be relatively “faceless,” with customer service involving few human interactions. Anonymity during returns processes can inadvertently make it more comfortable for shoppers to push the limits with their returns. People know they won’t have to physically explain the reason for sending an item back, something which may otherwise discourage them to commit returns fraud.

More deliberate criminal intent is also adding to the growing scale of returns fraud. Generally speaking, this is happening on two levels. There are “chancers” — individuals aiming to repeatedly exploit the generosity of returns policies, and organized crime groups that operate as networks. Amazon has set-up a dedicated team to combat organized retail crime, including criminals charging fees to obtain fraudulent returns. 

Both types of criminal will deploy a number of different tactics, which aim to defraud the quality control inspections engaged during returns processing. In some instances, criminal activity will be intensified during busy periods such as the festive peak, when fraudsters believe high volumes of returns make it easier for them to bypass retailers’ checks. 

Resource Link: https://www.reboundreturns.com/

Outlook: Accessible and accurate returns data, collaboration between retailers and returns partners, and advances in software and AI, are all helping to tackle the growing problem of returns fraud. Technology and data analytics are combining to flag problems and stop returns fraud at source and are underpinning robust quality control inspections that quickly distinguish between genuine returns and fraud. Solutions will advance further in 2026.