Blog: US retailers predict $2.2bn holiday fraud loss

Katie Smith | 21 December 2015

Holiday return fraud is likely to cost US retailers US$2.2bn this year, up 15.8% from a year ago, according to new research.

A survey by the National Retail Federation (NRF) found that 3.5% of holiday returns are likely to be fraudulent in 2015, up from the estimated 3% reported last year.

Retailers surveyed estimate total annual returns will reach $260.5bn, or 8% of total retail sales, with $9.1bn of retailers’ annual returns expected to be fraudulent, or 3.5% of the industry’s total returns.

In addition, 91.9% of retailers surveyed said they have experienced the return of stolen merchandise, down slightly from 92.7% last year. However, the survey found one-third (33.9%) of retail chains have experienced return fraud with use of e-receipts, up from 18.2% last year.

Wardrobing, or the return of used, non-defective merchandise, also presents a challenge for retailers, with 72.6% of those polled having experienced it in past year, broadly flat rom 2014.

However, fewer retailers in 2015 have experienced specific instances of return fraud. The survey found 75.8% experienced the return of merchandise purchased on fraudulent tender in 2015, down from 81.8% last year.

Sectors: Retail, Technology

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