Retail Report: Stores Can Expect More Return Fraud This Year


U.S. retailers can expect more people to try to return stolen merchandise this holiday season, according to a National Retail Federation report released Tuesday. The federation predicts that the cost of those fraudulent returns will reach $3.68 billion during the holiday season, a 34% jump from the $2.74 billion cost last year.

Of course, return fraud includes more than just stolen goods. The most common type of return fraud is the use and return of nondefective clothing and electronics products.

In response, some retailers are tinkering with their return policies to combat fraud. While most retailers -- about 84% -- say they plan to maintain the same return policies, 11% say they will tighten them while some 5% will loosen them. Retailers say attempted returns without a receipt are three times as likely to be fraudulent as attempted returns with a receipt.

Retailers are gearing up for what many predict will be a better holiday season than last year's. About 55% of retailers expect 2010 holiday season sales to grow from last year, with 3.5% forecasting that revenue will be much higher, according to a International Council of Shopping Centers report released earlier this month.