As retailers have provided customers with more options for in-store returns, they've inadvertently created new ways for fraud and abuse to slip through the cracks.

According to a survey of 1,000-plus consumers from loss prevention service Appriss Retail, 52% of returns were bought in-store and returned in-store in 2025, while 29% were bought online and returned in-store, and just 19% were bought online and returned online. Out of total fraudulent returns, 79% occurred in-store, allowing criminals and abusers to often move between online and in-person channels to avoid detection, particularly when return data isn't fully integrated across platforms.

"A customer blocked for suspicious activity online can return the same item in-store with no warning," the report noted.

The survey found that generous return policies have also made legitimate customers more likely to engage in so-called "gray-area behaviors," where they know that returning an item might not meet a store's policies. To wit, roughly 63% said that they were either somewhat or very comfortable returning items without tags, while 61% said the same about returning items after home trial, and 40% expressed few qualms about returning items worn for special occasions.

That can often turn customers into frequent returners, who believe they're operating within acceptable boundaries, but still admit that they might not be following policies to the letter. To address that issue, Appriss Retail recommends a "warn and approve" approach, where a business issues a warning to a customer demonstrating a pattern of high returns, but only starts rejecting returns if that person escalates to overt fraud or a frequency of returns that amounts to abuse.

"This graduated response educates customers before enforcing consequences in order to preserve relationships while reducing abuse," Appriss Retail explained, pointing out that 90% of consumers said they would still buy from a brand again after receiving a warning.