The National Retail Federation has released its 2014 Return Fraud Survey. According to the survey, which was conducted on 60 retail companies comprised of grocery, department, discount, specialty and small stores, the retail industry will lose approximately US$10.9 billion due to return fraud this year. Of that amount, US$3.8 billion is estimated to be lost this holiday season compared to US$3.4 billion last year.
The retailers surveyed believe about 5.5 per cent of returns made during the holiday season are fraudulent. “Today’s sophisticated technology does well keeping criminals at arm’s length but often isn’t enough to completely stop the unethical practices of organized and individual retail fraud occurrences,” said NRF Vice President of Loss Prevention Bob Moraca in a press release. “Return fraud has become an unfortunate trend in retail thanks to thieves taking advantage of retailers’ return policies to benefit from the cash or store credit they don’t deserve. Additionally, many of these return fraud instances are a direct result of larger, more experienced crime rings that continue to pose serious threats to retailers’ operations and their bottom lines.”
The survey found that 92.7 per cent of retailers have allowed the return of stolen merchandise in 2014, and 78.2 per cent said organized retail crime groups attempted to make returns in their store. As a result of these growing numbers, many retailers are adopting the practice of having a customer who is returning merchandise to show identification in an effort to curb fraud numbers.
