December 7, 2012, 11:48 AM

Fraudulent returns of online purchases trouble stores

Retailers say about 4% of in-store returns of online goods are fraudulent. 

Allison Enright

Editor

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Chain retailers that accept returns in their physical stores of goods sold through their e-commerce sites say they are encountering return fraud tied to those goods, according to the National Retail Federation. Return fraud encompasses customers who return merchandise they’ve used, use counterfeit receipts or return stolen merchandise.

86% of the 60 retailers participating in the National Retail Federation’s 2012 Return Fraud Survey say they accept returns in their stores of goods purchased online. These consumers don’t have receipts printed on register tape but instead have what the survey calls e-receipts. 19.3% of all retailers in the survey say they’ve encountered return fraud with e-receipts, and those retailers estimate that 3.9% of all in-store returns of online purchases are fraudulent.

“Many shoppers love the convenience and flexibility that digital receipts offer them, and unfortunately criminals are finding ways to manipulate them,” says Rich Mellor, vice president of loss prevention at the National Retail Federation, a trade group for retailers.

45.6% of retailers say they’ve had consumers use counterfeit receipts to return merchandise over the last year. 64.9% say they’ve had consumers return used, non-defective merchandise, a practice the NRF calls “wardrobing.” The NRF says retailers will lose approximately $8.9 billion to return fraud this year, with $2.9 billion of that occurring during the holiday season. A previous NRF survey estimated total returns increased 4% during the 2011 holiday season.

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