Artwise Trading Limited - Retailers are looking to tighten rules as fraudulent returns surge

QUARRY BAY, Hong Kong - Jan. 3, 2024 - PRLog -- However, although returns are expected to be somewhat lower in 2023 than the previous year, businesses are battling the rising problem of fraudulent returns, instituting new regulations to avoid misuse while ensuring consumers continue to purchase.

According to a National Retail Federation (NRF) estimate, total retail shopping returns in 2023 would equal $743 billion in total products, or 14.5% of total sales.

This compares to around 16.5% of total sales in 2022.

Online return rates are higher, with merchants dealing with returns on 17.6% of their orders, compared to 10% for all-cash sales.

'Wardrobing' is the most common kind of return fraud.

While the number of returned purchases is decreasing, more customers are engaging in fraud and abuse, accounting for 13.7% of all returns, according to the NRF.

The most prevalent kind of fraud is "wardrobing," which occurs when buyers return old, non-defective products such as apparel. This was a concern for approximately 49% of the retailers polled by the NRF. A related issue is "bracketing," which occurs when customers purchase numerous copies of an item only to return the undesirable ones later.

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