Almost all retailers are faced with return fraud (graphic: Business Wire).

A new survey shows that returns fraud is a widespread problem that has a significant impact on retail.

According to “The Rise in Returns Fraud,” a survey by returns management platform Loop of more than 600 full-time retail employees in the U.S., U.K. and Australia, nearly all (99%) respondents said their company had been a victim of some form of returns fraud or policy abuse in the past 12 months.

The survey also shows that respondents detect return fraud (44%) and policy abuse (43%) are the top trends having the greatest impact on their businesses today, ahead of factors such as operational costs and supply chain challenges.

The most common reason respondents cited for return fraud is that due to the current economic climate, shoppers are trying to exploit return policies to improve their financial situation (43%). Other factors cited by respondents include dissatisfaction with product quality. (41%) and the intention to use the items only temporarily (35%).

Other key findings from the report include:

• Quality disputes (53%) were the most common type of fraud/policy abuse faced by companies surveyed in the last 12 months, followed by customers attempting to return items that were not eligible for return (44%) and wardrobeing (purchasing clothing with the intention of returning it after one or short-term wear – 38%).
• Almost all respondents (94%) agree that their company is taking the rise in returns fraud and policy abuse seriously. However, less than half of respondents (46%) rate their company’s detection and prevention measures as “very effective.”
• More than half (55%) of respondents said their company prioritizes the customer experience over fraud and abuse prevention, and 52% said “maintaining a good customer experience” is the biggest challenge their company faces in combating return fraud or policy abuse.