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Security NewswireRetail/Restaurants/Convenience

Return Fraud to Cost Retailers $2.9 Billion This Holiday Season

December 4, 2012

Return fraud is estimated to cost retailers $2.9 billion this holiday season as criminals return stolen merchandise, use counterfeit receipts or even return items that have been already worn or that are not defective, according to NRF’s 2012 Return Fraud Survey, completed by loss prevention executives at 60 retail companies.

The survey estimates that the industry will lose an estimated $8.9 billion to return fraud this year, and $2.9 billion during the holiday season alone. Overall, retailers estimate that 4.6 percent of holiday returns are fraudulent, an NRF press release states.

According to the survey, 96.5 percent of retailers polled say they have experienced the return of stolen merchandise in the last year, and 84.2 percent report they have experienced the return of merchandise purchased on fraudulent or stolen tender.

Wardrobing – the return of used, non-defective merchandise such as special occasion apparel and certain electronics – has effected nearly two-thirds (64.9 percent) of retailers within the last year. Additionally 45.6 percent found criminals using counterfeit receipts to return merchandise. Employee fraud or collusion with external sources is also a problem as 80.7 percent report this has been an issue over the past year.

Nearly two in 10 retailers say they have dealt with e-receipt return fraud, especially as 86 percent say they allow customers to return merchandise purchased online in their stores.

Even so, 83.1 percent of respondents say their return policies will remain unchanged from last year’s holiday season, and 10.2 percent say they will loosen their policies to help ease the process for gift givers and recipients. 

KEYWORDS: fraud trends holiday crime retail security retail theft

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