Returns fraud and policy abuse pervasive among U.S. shoppers

A new survey has some somber findings about consumer behavior when it comes to returning e-commerce purchases.

Nearly four-in-10 respondents (39%) admit to having either engaged in return policy abuse or fraudulent behaviors themselves in the past 12 months or know of someone who has, according to a survey of 1,000 U.S. consumers who have made a return of an online purchase in the last 12 months from return management platform Loop Returns. The behaviors respondents were asked about ranged across outright fraud, return policy abuse, and other unfavorable return behaviors.

Alarmingly, between 20% and 30% of shoppers who admit to engaging in these behaviors do so at a high frequency. For example, 31% of the respondents said they have worn or used an item while planning to return it at least once a week.

In other findings, over half of shoppers (54%) say they commonly engage in "bracketing" — the practice of ordering multiple items to determine size/fit, with the intention of returning at least one item. Providing more accurate size measurements or improved product images can go a long way toward deterring the practice, advised Loop.

The survey also found that charging a fee for returns would dissuade close to four in 10 respondents (37%) from engaging in fraud or abuse. (However, a recent survey from Blue Yonder indicates that while 89% of retailers have changed their returns policies in the past 12 months to make them more expensive for consumers, or otherwise tightening the restrictions around returns, 59% experienced an increase in the rate of returns over that same period.) 

Other insights from the Loop study are below.

•Three-in-10 (31%) respondents said they needed the money back they’d spent on an item.

•More than one-in-three (36%) wanted an item for a single event.

•Almost one-in-four (23%) respondents were taking advantage of a lenient return policy.

•Fifteen percent of respondents wanted to keep an item without paying for it.

“Return policy abuse and fraud pose an enormous challenge to retail brands,” said Hannah Bravo, COO at Loop Returns. “At Loop, we’ve seen retailers begin to actively tackle this problem, evidenced by an overall decline in refund windows and an increase in quality inspection before issuing refunds. There is still so much more work to do to reduce the impact of returns fraud and abuse on retailers’ bottom lines while retaining their best customers.”

The survey explored consumer return policy abuse behaviors and perceptions and was conducted between Nov. 22 and Dec. 3, 2023.