Fraudulent returns cost retailers estimated £29m — report

Retailers whitethorn person mislaid an estimated £29m ($38.3m) to perchance fraudulent returns crossed 1 cardinal returned orders, according to caller investigation by omnichannel returns absorption specializer ReBound Returns.

As elaborate successful ReBound's The Returns Fraud Playbook report, the findings are based connected returned orders processed for retail clients betwixt July 2025 and May 2026.

It points to what the institution described arsenic shortcomings successful retailers' quality to place and code returns fraud.

The study comes arsenic online instrumentality rates attack 20% of sales, with the US online returns marketplace estimated to beryllium worthy astir $850bn.

ReBound said retailers are peculiarly exposed due to the fact that refunds are often issued earlier returned items are physically inspected.

It besides noted that returns information is often fragmented crossed e-commerce platforms, stores and third-party marketplaces, making fraud detection much difficult.

ReBound Returns merchandise manager Wouter 10 Heggeler said: "The returns process has go a unsighted spot for retailers. Investment successful fraud prevention is focused astir wholly connected the constituent of purchase.

"Once a instrumentality is initiated, astir retailers are operating without the visibility they request to drawback what is really coming backmost to them. The effect is that galore are absorbing losses they cannot identify, fto unsocial measurement oregon tackle the basal cause."

Based connected its analysis, the institution estimated that a mid-sized manner retailer with yearly income of £100m, a instrumentality complaint of 20% and a fraud complaint of 5% could incur losses of astir £1m each twelvemonth from fraudulent returns.

For a ample omnichannel retailer operating astatine the aforesaid fraud rate, yearly losses could scope £3.5m.

At the endeavor level, a retailer generating £960m successful yearly income and experiencing a 7% fraud complaint could spot losses emergence to £20m annually.

The study besides referenced figures from UK fraud prevention organisation Cifas, which recovered that 17% of adults bash not respect falsely claiming a retail refund arsenic illegal.

Among consumers aged 16 to 24, 35% said they would beryllium consenting to supply inaccurate accusation to unafraid a refund.

ReBound identified respective behavioural patterns linked to suspected returns fraud.

Customers flagged arsenic perchance fraudulent retained products for a median of 18 days earlier starting a return, compared with 9.5 days for emblematic returns.

Country-level investigation showed Poland recorded the highest identified returns fraud complaint astatine 6.6%, followed by Denmark astatine 5.3%, some exceeding the wide mean complaint of 3.9%.

"Fraudulent returns outgo retailers estimated £29m — report" was primitively created and published by Retail Insight Network, a GlobalData owned brand.