January 1, Shameless Customers Pocket Billions From Unprecedented Scheme

Retailers across the United States are facing an unprecedented wave of fraudulent holiday returns, receiving counterfeits, fake receipts, or badly damaged goods from customers expecting full refunds on top-of-the-line merchandise. In some cases, returns on televisions revealed boxes filled with bricks or stolen merchandise inside.

The National Retail Federation (NRF) estimated that more than $101 billion in merchandise was returned fraudulently in the U.S. in 2023. This accounts for about 14% of the overall returned goods retailers received last year and is more than twice the level in 2020. For every $100 in returned merchandise, retailers will lose $13.70 in return fraud.

NRF Executive Director of Research Mark Mathews said, “Retailers continue to test and implement new ways to minimize losses from returns, particularly those that are fraudulent, while at the same time optimizing the shopping experience for their customers.”

He added that the industry is prioritizing efforts to reduce the amount of merchandise returned in stores and online.

The volume of returns has been eating into profit margins and could put some businesses in the red. Enright told the Wall Street Journal that more and more people have been trying to game the system, hoping a returned shipping label scanned by a postal carrier secures a refund before the retailer can confirm the correct item has been returned.

The most common type of return fraud is “wardrobing,” which occurs when a customer returns clothing that has been worn, torn, or has stains on it that weren’t there when it was sold, according to the NRF.

A November survey of more than 1,000 adult consumers by returns technology firm Optoro found that more than one-third of shoppers admitted to embellishing or exaggerating the reason for a return to avoid fees or receive a refund.

Of those polled, 30% admitted to wardrobing, 43% said they engage in wardrobing a few times a year, and 23% admitted to doing it at least once a month. Forty percent of shoppers aged 18-29 were most likely to “wardrobe” items, the survey found.

Amena Ali, chief executive of Optoro, said fraud is “definitely becoming more and more of a concern to retailers,” adding that people are shipping back obvious counterfeits to luxury retailers looking to make a quick buck.

Retailers have been trying to fight back, requesting shoppers to bring returns to stores where they can be checked out on the spot. The in-store return also allows retailers to track people who may be abusing return policies.

To combat this issue, retailers are also implementing shorter return windows and employee education on how to spot fraudulent returns.

Why It Matters (op-ed)

The alarming rise in fraudulent holiday returns is yet another example of the moral decay plaguing our great nation. The left’s relentless attack on traditional values and lack of accountability has emboldened dishonest behavior, as evidenced by the NRF’s staggering $101 billion estimate for return fraud in 2023.

Retailers are now forced to waste resources combating this growing threat, which ultimately harms honest, hardworking Americans. With businesses already struggling due to liberal policies, this surge in fraud could be the final nail in the coffin for some.

It’s high time we address the root cause of this issue: the erosion of our core values and principles. Let’s return to a society that values honesty, integrity, and personal responsibility.

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