The Journal. cover image

The Journal.

Fraudulent Online Returns Cost Retailers Billions

Sep 13, 2024
Liz Young, a WSJ reporter specializing in online return fraud, dives into the financial chaos retailers face from scammers exploiting return policies. She reveals that over 17% of purchases are returned, accumulating a staggering $250 billion loss annually. With tactics like claiming non-receipts and utilizing social media to orchestrate schemes, retailers are torn between customer satisfaction and fraud prevention. Young also discusses specific cases, including one that led to over $3.9 million in losses, highlighting the desperate need for tight-knit return policies.
18:00

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Podcast summary created with Snipd AI

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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