Home Survey: Return Policy Abuse, Fraud Prevalent in U.S.
January 24, 2024

Survey: Return Policy Abuse, Fraud Prevalent in U.S.

Posted In: Retail Articles

A survey sponsored by Loop, a return management platform for e-commerce brands, found that 39% of online shoppers admit to engaging in return policy abuse or fraudulent behaviors in the past 12 months or know someone who has.

The behaviors ranged from outright fraud to return policy abuse to questionable behavior that still costs retailers and their suppliers.

Between 20% and 30% of shoppers who admit to engaging in questionable returns behaviors do so at a high frequency. In one example, 31% of such respondents said that, at least once, they have worn or used an item while planning to return it.

In addition, 54% of respondents said they agree they commonly engage in bracketing, defined as ordering multiple items to determine size/fit, with the intention of returning at least one.

Return policy abuse, fraud, and other unfavorable return-related behaviors can exploit retail policies yet are common and are not always considered abusive by consumers or merchants.

For 2023, Loop pointed out, a National Retail Federation estimate indicated that 13.7% of returns across the United States were fraudulent.

Consumers who engage in the range of behaviors the survey covers gave a range of reasons why they do so:

  • 54% wanted to determine the size/fit of an item purchased
  • 31% needed the money back they’d spent on an item
  • 36% wanted an item for a single event
  • 23% succumbed to a lenient return policy
  • 15% wanted an item but didn’t want to pay for it

According to Jonathan Poma, Loop CEO, “There is no one-size-fits-all approach to returns, and each brand needs to understand their shoppers’ behavior to craft a targeted strategy that reduces costly fraud while balancing the need for an exceptional customer experience.”

Hannah Bravo, Loop COO, added, “Return policy abuse and fraud pose an enormous challenge to retail brands. At Loop, we’ve seen merchants begin to actively tackle this problem, evidenced by an overall decline in refund windows and an increase in quality inspection before issuing refunds. There is still so much more work to do to reduce the impact of returns fraud and abuse on merchants’ bottom lines while retaining their best customers.”

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