The data, collected by omnichannel returns management firm ReBound Returns, is drawn from one million returned orders processed on behalf of its retail clients between July 2025 and May 2026.
The findings highlight a growing challenge for retailers as return rates for online sales approach 20%, with the value in the US market alone nearing $850bn.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
ReBound Returns has published these results in its new report, The Returns Fraud Playbook. The research indicates that as more consumers return online purchases, cases of fraud and abuse are rising.
According to the Merchant Risk Council, ‘refund and returns policy abuse’ is currently considered the most common type of fraud faced by merchants. This trend continues despite the widespread use of identity verification, authentication procedures, and risk-scoring systems designed to prevent fraud during the initial purchase.
The report identifies a key issue in that many retailers refund customers before physically inspecting returned goods.
Data relating to returns is often fragmented, being kept separately across multiple platforms, including e-commerce sites, physical stores, and external marketplaces.
This lack of consolidated information makes it difficult for operational teams to gain an accurate overview of all returns activity or to identify potentially fraudulent claims effectively.
The report also models how a modest fraud rate can translate into substantial annual losses at scale. For a mid-market fashion retailer with £100m in annual sales, a 20% return rate, and a 5% fraud rate, projected losses could reach £1m per year. For a larger omnichannel retailer at the same fraud rate, the estimated loss rises to £3.5m annually.
At enterprise scale, £960m in sales and a 7% fraud rate, the projected loss reaches £20m each year.
The implication is straightforward: even when fraud appears “manageable” in percentage terms, the absolute cost can be material.
ReBound Returns product manager Wouter ten Heggeler said: “The returns process has become a blind spot for retailers. Investment in fraud prevention is focused almost entirely on the point of purchase. Once a return is initiated, most retailers are operating without the visibility they need to catch what is actually coming back to them. The result is that many are absorbing losses they cannot identify, let alone measure or tackle the root cause.”
The research by ReBound Returns found that combining multiple data points can help retailers detect and analyse potential returns fraud. It noted that returns identified as potentially fraudulent typically have a longer lead time between purchase and the initiation of a return, with a median lead time of 18 days, compared to 9.5 days for standard returns.
In addition, the analysis showed variations in returns fraud rates across different countries. Poland registered the highest rate at 6.6%, followed by Denmark at 5.3%, both significantly above the overall average of 3.9%.
Ten Heggeler added: “Returns fraud does not need to be widespread to cause serious financial harm; the problem scales directly with sales. A fraud rate that looks manageable on paper actually represents millions in losses, and without the right systems in place, most retailers have no way of knowing how exposed they actually are.
“Current returns systems are not built for the increasing scale and sophistication of modern returns fraud. Most rely on static rules and manual review, with limited ability to predict behaviour or flag risk before a refund is issued. However, with a more effective model – combining behavioural analysis and risk scoring at the point of return initiation, physical verification at hub level, and connected data across every channel – it is possible to catch fraudulent activity before it becomes a financial loss, without adding friction for legitimate customers.”
