Return fraud includes wardrobing (using items then returning them), switching products, claiming non-receipt, or using stolen receipts. Retailers lose an estimated 10-20% of return value to fraud. AI classification can detect fraud patterns by analyzing return frequency, account age, claim consistency, and product condition. Combating fraud requires balancing detection with legitimate customer experience.
← Glossary
Return Fraud
Deceptive return practices where customers exploit return policies for financial gain without legitimate cause.
Related terms
- False Return Claim — A return request where the stated reason doesn't match the actual condition or circumstances of the return.
- Chargeback — A dispute filed by a customer with their bank to reverse a payment, often resulting from a failed return or refund experience.
- Return Policy — The documented rules governing whether and how customers can return products for refunds or exchanges.
- Restocking Fee — A charge deducted from customer refunds to cover the cost of processing and inspecting returned items.