Analyst Insight: Combatting losses caused by fraudulent returns is a growing problem for retailers and consumer brands, with concerning signs that issues are likely to become more widespread and complex in 2026. A look at what's happening in mature e-commerce markets, which have well-established returns policies, reveals the growing scale of the returns fraud problem. In the U.S., industry reports from Deloitte and the National Retail Federation (NRF) suggest that 9% to 15% of returns were fraudulent during 2024 and 2025, costing businesses billions of dollars.
U.K.-based fraud prevention service Cifas reports that 17% of adults don't think it's illegal to fraudulently claim a retail refund, while 35% of 16- to 24-year-olds admitted they'd be willing to lie to get a refund. Similar issues of returns and refund abuse exist in Germany. Ravelin's Global Fraud Trends report highlights that refund abuse rose from 53% last year to 57% in 2025.
Returns service providers are increasingly dedicating resources and innovation to helping retailers and brands tackle fraudulent returns. The issue is becoming so problematic that "refund and returns policy abuse" has been deemed by the global Merchant Risk Council as the most prevalent fraud type facing merchants such as online retailers.
A series of factors are causing returns fraud to become more complex and widespread. Wardrobing — where a consumer uses a product and sends it back — is being pushed to the extreme. Influencer culture is contributing to this, while tough economic conditions squeezing personal finances are also playing a role. Consumers feel pressure to wear the latest fashions and not to repeat outfits, but this isn't always affordable. From a supply chain perspective, retailers won't be able to keep reverse logistics costs sustainable unless they invest in identity verification, return-behavior analytics and condition-based grading processes.
