As we have noted before, customer fraud is a multi-billion headache for retailers. And return fraud is an especially tough issue with which to deal. 

Just for the 2013 holiday shopping season, it is estimated that by the National Retail Federation that customer return fraud will be $3.4 billion:

“As one of the most serious, but often most misunderstood, retail loss prevention issues, return fraud costs retailers billions of dollars every year.  According to NRF’s 2013 Return Fraud Survey completed by loss prevention executives at 62 retail companies, the industry will lose an estimated $8.76 billion to return fraud this year, and $3.39 billion during the holiday season alone. Overall, 5.8 percent of holiday returns are fraudulent, up slightly from 4.6 percent last year.”

“While coverage of this issue paints return fraud as one of the ‘less severe’ retail crimes, the fact of the matter is that returning used or stolen items, or even using false tender to purchase items is fraud, period,” said NRF Vice President of Loss Prevention Rich Mellor. “Recent efforts to combat fraudulent activity are slowly starting to work, but criminals are becoming more savvy and technologically advanced in their methods, making it even more difficult for retailers and law enforcement to keep up with the growing problem.”

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