Published: June 30, 2021
Reading time: 4 minute read
Written by: Forter Team

Return fraud can be a scary thing for businesses to deal with.

How do you know if you’re dealing with it? What are the signs? How many different types of return fraud are out there?

We’ve talked about return fraud in general before and highlighted everything from how it affects businesses to whether or not it’s actually a crime.

But for many, how to prevent return fraud remains a mystery.

Here are three strategies to take advantage of to keep return fraud to a minimum.

Clarify Your Return Policy and Make it Easily Accessible

Preventing return fraud often begins with ensuring that your return policy is not only crystal clear, but simple to access for customers.

It’s true that writing a clear and concise return policy isn’t the most glamorous part of running a retail business. However, it’s crucial for your customers to understand exactly when items are returnable and what they need to do so.

How exactly should you go about fine-tuning your return policy to have the best chance of preventing return fraud?

Here are some elements of your return policy to review.

Time

Up to what point is your merchandise returnable? Depending on the products you’re selling, the time limit for returns can vary significantly. This is one of the most important aspects of your return policy. Customers need to know when their merchandise is returnable, and in turn, having a set time limit can prevent certain return fraud activities such as shoplisting with older receipts.

Condition of goods

Do goods need to be unopened to be returned? Should tags be attached? These are questions that need to be answered to help keep return fraud to a minimum.

For example, requiring tags to be attached for a return can prevent certain types of return fraud, such as wardrobing, should the tags be in an area that might make it uncomfortable to wear the clothing for a night.

Restocking fees

Restocking fees are another aspect of a return policy that can be visited to prevent return fraud.

However, it should be noted that they can also have adverse effects on customer relationships in some cases.

Customers may not want to purchase something that they’ll have to pay to return should it not suit their needs. They tend to be more appropriate for higher-ticket items. Visit the topic of restocking fees with caution.

Returns requiring shipping

Indicating exactly what your customers need to do to return merchandise when they can’t do so in person is another necessary aspect of your return policy.

There are a few different aspects of this practice to look into for return fraud prevention, including:

  • Proper packaging
  • Shipping insurance
  • A list of acceptable carriers

Requiring original packaging, for example, could prevent stolen merchandise from being passed off as new when shipped for a return.

Receipts

The way your business handles receipts can go a long way towards preventing return fraud as well. While they do go hand in hand with a proper return policy, they’re a big enough topic that they deserve their own talking point.

First of all, it should come as no surprise that requiring a receipt for any return is crucial for preventing a sizable portion of return fraud. Allowing customers to return merchandise without a receipt would essentially open the flood gates for return fraudsters. At the very least, cash returns specifically should only be issued to customers with a receipt.

It may be a good idea to limit cash returns as much as possible, offering store credit instead. Even to those with a receipt in hand. However, this could potentially scare away customers, so weigh the pros and cons accordingly.

Look Into Policy Abuse Protection Services

Preventing return fraud on your own, even with these tips, can be a daunting task with just how prevalent it is today.

Wouldn’t it be nice to have a service to help you with that?

Thankfully, there are services out there designed to help with policy abuse, with return fraud being one of the main offenders. They can help streamline the return fraud prevention process in a variety of ways, from blocking repeat offenders to automating the enforcement of your return policy.

Forter’s Policy Abuse Protection is an example of a service designed to aid with return fraud prevention. Tailored prevention to your unique business and return policies makes it easier than ever to automate the return fraud prevention process.

Conclusion

There’s no doubt that return fraud is a major problem for businesses. It can cost them big in many ways, from lost revenue to damaged customer relationships.

With these tips, you can begin to reclaim control of your returns and keep return fraud at bay.

Looking for More Info on Return Fraud?

Forter’s “Return to Sender” report can help shine a light on the hidden costs and help you determine how to prevent return fraud. Download it now to help avoid these pitfalls.

4 minute read