Retailers expect more than $2.2B worth of return fraud this holiday season

DENVER BUSINESS JOURNAL - Fraudulent returns will cost retailers more than $2 billion this holiday season. But are companies invading your privacy to stop it?

Holiday fraud is part of a $15.9 billion annual issue, according to the Motley Fool, citing stats out from the National Retail Federation. During the holidays, returns come in at 10 percent, 2 percent higher than the rest of the year, and about 3.5 percent of those returns wind up being fraudulent. The problem impacts tax revenue and retailers pass along the costs to the consumer.

During the 2016 holiday shopping season, specifically, the Motley Fool said, the NRF estimates there will be more than $2.2 billion worth of fraudulent returns. That's up from last year, but down from both 2013 and 2014, when the NRF estimates there were about $3.4 billion and $3.8 billion worth of fraudulent returns, respectively.

According to the Chicago Tribune, there are several popular holiday return scams. One is making a "hot exchange," when a thief steals an item and comes back later to get the cash value of the stolen product. Others use counterfeit bills to purchase an item, then get real currency or a gift card when they return it. Some work with a store employee to falsify a return claim. Still others buy expensive outfits or jewelry for an important occasion, only to return the items shortly after, the Tribune explained.

Read more at the Denver Business Journal: http://bizj.us/1oypza

(© 2016 American City Business Journals. All rights reserved.)
 


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