Security & Fraud

Why Consumers Might Have A Tough Time Returning Gifts

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Enabling frictionless and convenient returns has become a major selling point for retailers, but new fraud rules could be standing in the way.

According to a new study by Consumer World, many retailers are making their holiday return policies more complicated than they have in the past in an effort to thwart fraudsters.

These “slice-and-dice” type policies impose different rules for returning different categories of products, such as setting a stricter policy for returning electronics versus clothing items. Some merchants are also taking things a step further by actually tracking or monitoring how often a shopper makes returns.

Total annual returns this year are expected to hit $260.5 million, with 3.5 percent predicted to be fraudulent, the National Retail Federation disclosed earlier this month.

While retailers want to be as hospitable as possible to any customer who comes in their store, they also need to weed out the fraudulent and serial returners. The NRF estimates that fraudulent returns will cost the retail industry $2.2 billion this year, up from $1.9 billion last year.

“Retailers have the difficult task of providing superior customer service by always giving the benefit of the doubt to their shoppers when it comes to returns, while simultaneously working to make sure they protect their business assets,” Bob Moraca, NRF vice president of loss prevention, said in a recent statement.

As Fortune reported Monday (Dec. 28), there are some retailers still willing to give consumers more lenient and flexible return policies, despite the ongoing risk of fraud.

Both Macy’s and Target have joined the 49 percent of online stores surveyed that now offer free returns, ensuring the costs of sending back unwanted items is covered by the merchants themselves.

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