Retailers Losing $90B Annually Due to Bogus Returns, Promo Abuse

A new study puts a big number on the damages that e-commerce businesses sustain each year due to bad actors who abuse policies designed to make things easier for shoppers, PYMNTS reports.

According to research by PYMNTS in collaboration with Forter, abuse of customer service policies costs large U.S. retailers (those which generate more than $100 million in annual revenue) as much as a combined $89 billion per year. Retailers may lose up to 2.2 percent in annual revenue as a result of these abuses.

The most prevalent is promotion abuse, or taking undue advantage of rewards, sales and other promotions. Additionally, return abuse – when a consumer returns an item that’s not eligible for return – impacts 60 percent of large retailers.

As for a solution, a sure-fire one hasn’t yet been developed. “Many brands have taken the approach of developing their own methods of tracking these types of fraud, but few are successful in tracking repeat offenders and blocking new fraud attempts simultaneously,” the article says.

Read more at PYMNTS.