US merchandise returns hit $685 bn, 13.21% of retail sales in 2024

The fraudulent returns and claims resulted in a $103 billion loss for retailers across the country in 2024, with 15.14 per cent of all returns deemed fraudulent, meaning a customer attempted to return an item to a retailer for a refund, knowing the item did not qualify for a refund according to the store's policy, revealed the annual 2024 Consumer Returns in the Retail Industry Report by Appriss Retail in collaboration with Deloitte.

Sixty per cent of retailers surveyed reported incidents of ‘wardrobing,’ or the act of consumers buying an item, using the merchandise, and then returning it. Fifty-five per cent cited cases of returning an item obtained through fraudulent or stolen tender, such as stolen credit cards, counterfeit bills, gift cards obtained through fraudulent means or fraudulent checks. Forty-eight per cent of retailers faced occurrences of returning stolen merchandise.

“Our annual research highlights the serious problem of returns fraud, and why an AI-powered, data-driven approach to loss prevention can reduce fraud and keep consumers loyal,” Appriss Retail said in its press release highlighting essentials of the report.

“It is clear why retailers want to limit bad actors that exhibit fraudulent and abusive returns behaviour, but the reality is that they are finding stricter returns policies are not reducing the returns fraud they face,” said Michael Osborne, chief executive officer (CEO), Appriss Retail. “Our annual research highlights the serious problem of returns fraud, and why an AI-powered, data-driven approach to loss prevention can reduce fraud and keep consumers loyal.”

Appriss Retail, which supports one-third of all US omnichannel sales across 150,000 retail locations and serves 60 of the top 100 US retailers, led this comprehensive analysis.

ALCHEMPro News Desk (SG)