Appriss Retail Annual Research: Fraudulent Returns and Claims Cost Retailers $103B in 2024

The Consumer Returns in the Retail Industry Report from Appriss Retail, in collaboration with Deloitte, reveals no signs of returns fraud slowing down; total retail returns dollars reached $685 billion

Appriss Retail Annual Research: Fraudulent Returns and Claims Cost Retailers $103B in 2024

Matthew Boncosky
Ketner Group Communications (for Appriss Retail)
Matthew.Boncosky@ketnergroup.com

Appriss Retail, a leading provider of data and analytics solutions for reducing retail losses and combating return and claim fraud, has released the annual 2024 Consumer Returns in the Retail Industry Report, in collaboration with Deloitte*.

Appriss Retail, which supports one-third of all U.S. omnichannel sales across 150,000 retail locations and serves 60 of the top 100 U.S. retailers, led this comprehensive analysis. Total merchandise returns for the year reached $685 billion, representing 13.21% of total retail sales, which amounted to $5.19 trillion in 2024, according to the report.

The report reveals fraudulent returns and claims resulted in a $103 billion loss for retailers in 2024, with 15.14% of all returns deemed fraudulent, meaning a customer attempted to return an item to a retailer for a refund, knowing the item did not qualify for a refund according to the store's policy.

The Appriss Retail research highlights that despite growing efforts by retailers to curb retail returns fraud through stricter returns policies, the problem remains prevalent. The report includes insights on the leading types of returns fraud and abuse reported by retailers in 2024 such as:

60% of retailers surveyed reported incidents of “wardrobing,” or the act of consumers buying an item, using the merchandise, and then returning it.
55% cited cases of returning an item obtained through fraudulent or stolen tender, such as stolen credit cards, counterfeit bills, gift cards obtained through fraudulent means or fraudulent checks.
48% of retailers faced occurrences of returning stolen merchandise.

“It’s clear why retailers want to limit bad actors that exhibit fraudulent and abusive returns behavior, but the reality is that they are finding stricter returns policies are not reducing the returns fraud they face,” said Michael Osborne, CEO, Appriss Retail. “Our annual research highlights the serious problem of returns fraud, and why an AI-powered, data-driven approach to loss prevention can reduce fraud and keep consumers loyal.”

Appriss Retail’s seminal research provides comprehensive analysis of retail returns, claims, fraud, and abuse on a large scale. The report, the seventh year running, examines data from more than 60 leading U.S. retailers, the U.S. Census Bureau, and a Retail Dive survey of 150 retail executives and 1,000 consumers.

“Returns are a significant cost for retailers, and the rise of online shopping could increase this trend,” said Kevin Mahoney, managing director, retail, Deloitte Consulting LLP. “As retailers implement policies to address this issue, they should avoid negatively affecting customer loyalty and retention. Effective policies should reduce losses for the retailer while minimally impacting the customer experience. This approach can be crucial for long-term success.”

To learn more, download the report.

About Appriss Retail

Appriss Retail provides retailers with protection against fraud and abuse for every transaction, no matter where it happens. With more than 20 years of retail data science expertise and experience, we’ve built a collective, omnichannel intelligence platform that is trusted by over 60 of the top 100 U.S. retailers, covering one-third of all U.S. omnichannel sales across 150,000 locations. Globally, Appriss Retail reaches 45 countries across six continents. The company provides relevant, actionable, and profitable collective intelligence to retail operations, finance, marketing, and loss prevention teams. Appriss Retail’s performance-improvement solutions yield measurable results with a significant return on investment. For more information about Appriss Retail, visit apprissretail.com or our LinkedIn page.

*Please see www.deloitte.com/us/about for a detailed description of their legal structure.