Retail study shows effects of fraud in U.S.

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145903057A study by the National Retail Federation recently found that return fraud–which it cites as a serious but misunderstood source of retail loss–will account for nearly $8.8 billion in fraud this year.

According to the NRF’s Return Fraud Survey, nearly 6 percent of holiday returns are fraudulent and account for $3.4 billion.

“While coverage of this issue paints return fraud as one of the ‘less severe’ retail crimes, the fact of the matter is that returning used or stolen items, or even using false tender to purchase items is fraud, period,” said NRF Vice President of Loss Prevention Rich Mellor in a Dec. 6 news release. “Recent efforts to combat fraudulent activity are slowly starting to work, but criminals are becoming more savvy and technologically advanced in their methods, making it even more difficult for retailers and law enforcement to keep up with the growing problem.”

Of the 62 companies polled in October and November, 95 percent responded that they have experienced the return of stolen merchandise. Another 69 percent of those companies have experienced the purchase of products by means of fraud and 29.3 percent have experienced the return of products with counterfeit receipts, according to the study.

The study cites that one of the most common forms of retail fraud, which is know as wardrobing, involves the return of used, non-defective merchandise. Retailers have installed policies and tactics to prevent such loss, and many of those polled are seeing such methods effective.

“Many companies have employed specific tactics to help curb this unethical practice, and are beginning to see the fruits of their labors,” according to the news release. “On a scale of one to five, one being not at all effective, retailers rank their current policies at 3.55 in terms of being effective in deterring return fraud.”