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The Journal.

Fraudulent Online Returns Cost Retailers Billions

Sep 13, 2024
In this engaging discussion, Liz Young, a WSJ reporter, delves into the rampant issue of fraudulent online returns that are costing retailers billions. She reveals how scammers are cleverly exploiting return policies through apps and websites. The conversation highlights specific cases and the tough decisions retailers face between satisfying customers and curbing fraud. Young also uncovers shocking tactics, like using bogus receipts, and sheds light on the urgent need for enhanced measures to tackle this escalating crisis in e-commerce.
18:30

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Quick takeaways

  • Return fraud is costing retailers billions, with fraudsters manipulating return policies to secure refunds while retaining products.
  • Retailers are facing immense challenges in verifying return claims, often resulting in stricter return policies that could affect genuine customers.

Deep dives

The Scale of Online Return Fraud

Return fraud has emerged as a significant issue for online retailers, with some customers exploiting return policies on a large scale. Fraudsters are reporting items as not received, leading retailers to refund them without verification. This manipulation allows individuals to obtain refunds while retaining products, substantially impacting retailers financially. In some cases, this scheme sees customers ordering hundreds of items and receiving refunds amounting to tens of thousands of dollars, showcasing the extent of this fraudulent activity.

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