The retail industry will lose an estimated $3.68 billion to return fraud this holiday season, up from $2.74 billion last year, according to the National Retail Federation. The numbers are from the NRF’s annual Return Fraud Survey and highlight the challenge faced by retailers trying to offer good customer service while watching their bottom line.
“Retailers are still struggling to find the appropriate balance between providing stellar customer service for their shoppers while prohibiting criminals from taking advantage of lenient return policies,” said Joe LaRocca, Senior Asset Protection Advisor for the NRF. “Combating this very costly problem helps retailers keep prices low but can unfortunately involve establishing policies that inconvenience honest shoppers.”
The most common type of return fraud is return of stolen merchandise, which 93.5 percent of retailers say they have experienced in the last year. Wardrobing – the return of used, non-defective merchandise like special occasion apparel and certain electronics – also poses a huge problem, as more than six in 10 retailers (61.7%) say they been victims of this activity within the last year, up from 46.2 percent in 2009.