The 2014 holiday season has been a success by most metrics. Amazon reported some stellar Amazon Prime figures, mentioning that 60% of all Prime purchasers used mobile devices to shop. However, the retail industry in general is still suffering from fraud losses -- especially from returns.
An annual study by the National Retail Federation (NRF) estimated that the retail industry is expecting up to $10.9 billion in return fraud this year, up from $9.1 billion last year. Return fraud from the 2014 holiday season is estimated to be around $3.8 billion, up from last year’s $3.4 billion.
The survey interviewed loss prevention executives at 60 retail companies, including grocery chains, department stores, and speciality and small retailers. 92.7% of them said they have had customers attempting to return stolen items, which is actually down from last year. But in terms of “organized retail crime,” the figure jumped from 60.3% last year to 78.2%.
E-receipt fraud also rose this year -- 18.2% in 2014 versus 15.5% in 2013 -- just another example of how fraudsters are targeting online transactions, especially with retailers putting a stronger focus on security with offline transactions.
81.8% said they suffered losses resulting from return of goods that were purchased with stolen payment methods, which is a large increase from last year’s 69%. 38.2% of those surveyed said that they saw an increase in credit card fraud, and another 30.9% saw an increase in debit card fraud.
With issues like return fraud and chargebacks becoming a big issue for retailers over the past few years, merchants both big and small are realizing that they need to start focusing on separating the fraudulent transactions from the authentic ones. Trustev can help.