For retail and other companies that offer returns around the world, return fraud is a major issue. According to a report in 2015, a company earning $1 billion in annual revenue will lose anywhere between $2.8 million and $4.8 million simply due to fraudulent returns.
At ReverseLogix, we’re here to help prevent this from happening to you. Our returns management software will help you streamline your processes and limit fraud. Here are a few additional areas you can consider.
Change Your Policy
The simplest way to lower your rate of return fraud is by changing your policy. This is especially important around the holidays, when fraud rates skyrocket – many companies modify the policy to include a holiday returns cutoff date, for instance. You can also place restrictions on popular or high-volume orders, making a shorter period available for these kinds of items.
“Sharks” are consumers who intentionally purchase items, wear them once, and then return them – a practice called “wardrobing.” These products often can’t be put back on the market. A good way to avoid sharks is to incorporate anti-tampering devices, often removable tags that will prevent customers from wearing something before returning it.
Always ask customers to return the invoice or receipt that came with a product, and refuse returns otherwise. This will allow you to cross-reference the sale and ensure you’re not giving money back for a sale you never actually made.
Alternatives to Return Labels
Return labels make product returns easy for customers, but also for scammers. Consider alternative options here that will still benefit well-meaning customers without making it so easy for the less honest ones.
Leave a Cushion
How does, say, an electronics company keep a customer from buying a brand new flat-screen TV the day before a huge sporting event, then returning it the day after? By adding a cushion for big items like these. This could be something like a restocking fee, which can be attached to certain big-ticket items. Be careful about which items you attach this kind of fee to – focus mostly on electronics, seasonal items and fashion items that are on the higher end price-wise.
For more on how to limit returns fraud, or to find out more about how our reverse logistics system can help, speak to the pros at ReverseLogix today.