Abuse of Consumer Returns Policies Rife, Report Finds

Over a third of online U.S. shoppers (39%) said that they have either engaged in returns policy abuse or know somebody who has abused return policies in the last 12 months, based on a recent survey.

In a study published January 22 by the return management platform Loop, entitled “2024 Consumer Fraud Report,” among those who admitted to committing returns policy abuse, fraud, or other unfavorable return behaviors, between 20% and 30% said they engaged in this behavior at least once a week.

More than half of respondents (54%) agreed that they commonly took part in bracketing, which is the process of ordering multiple products in order to determine size and fit with the intention of returning at least one of the items they purchased.

The increased return rate has led to companies creating extra charges with 56.5% of Loop merchants saying they charge their customers for return shipping when processing refunds. The survey found these policies were effective because 37% of respondents said they would be dissuaded from engaging in return fraud or abuse if they were charged a fee to complete a return.

“Return policy abuse and fraud pose an enormous challenge to retail brands,” said Hannah Bravo, COO of Loop. “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. To achieve this, retail brands need partners with deep expertise and true customization engines powered by broad data sets and machine learning.”

Loop surveyed 1,000 online U.S. shoppers who have made returns over the last 12 months between November 22, 2023 and December 3, 2023 for this study.

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• Source: https://www.supplychainbrain.com/articles/38921-over-a-third-of-online-us-shoppers-know-people-abusing-return-policies