U.S. e-commerce fraudulent returns cost businesses $9 billion in 2012
today Apr 17, 2013
While e-commerce continues its dramatic growth worldwide, it comes with no surprise that the industry is faced with an increase in fraud. In North America, authorities estimate that fraudulent returns have cost e-commerce businesses some 9 billion dollars.
96.5% of online businesses indicated they had received recently stolen goods as returns instead of the products initially ordered. 84.2% of those same companies said they had received products purchased illegally as returns. The phenomenon known as wardrobing — buying clothes for a special occasion and then returning them — is another serious problem, affecting 64.5% of e-retailers. 45.6% of the companies received counterfeits as returns instead of the original shipped products. Another 80.7% of the companies are impacted by fraud perpetrated by website employees.
"Return fraud comes in a variety of forms and continues to present challenges for retailers trying to grapple with the sophisticated methods criminals are using to rip off retailers,” said National Retail Federation vice president of loss prevention Rich Mellor. “Even more troubling is the fact that innocent consumers often suffer because companies have to look for ways to prevent and detect all types of crime and fraud in their stores, oftentimes resorting to shorter return windows and limitations on the types of products that can be returned.”
Online sales now account for 10% of U.S. retail, totaling $186.2 billion in sales in 2012, according to Comscore. This represents an increase of 15%, buoyed by the most recent quarter that alone accounted for 30% of online spending this year
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