Retailers are facing a growing issue with return fraud, which has resulted in an estimated $101 billion loss from a total of $743 billion in returns in 2023. Techniques used by fraudulent shoppers include returning empty boxes and using fake receipts. Retailers are challenged to tighten return policies without alienating customers, especially since over 90% of shoppers are influenced by lenient policies. Analysts emphasize the need for advanced data analytics to identify fraud patterns while maintaining a positive customer experience, particularly amidst the rise of e-commerce.
"In recent years, we've seen many retailers ramp up investments in data and analytics to detect patterns and flag suspicious return activity. Still, striking the right balance between preventing fraud and keeping a positive customer experience is an ongoing challenge."
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