To build customer trust, having a good returns policy page is an absolute must. Your customers will see you as a trusted brand with quality if you have a solid returns policy page. But you have to be careful of return frauds, there are some fraudsters that can hack customer accounts to initiate returns and transactions. E-commerce sellers who want to stay away from this kind of fraud should educate themselves and about the ways to prevent it. Here are a few common return frauds you need to watch out for- 

Receipt Fraud 

Receipt fraud is a type of return fraud that involves stolen merchandise. In order to avoid the problem of not having a receipt, the customer attempts to return it with an invalid receipt. This could be fabricated, stolen, or even an older receipt. 
How to prevent it – SKUs on receipts can help with preventing receipt fraud. If the SKU doesn’t match the item, then the return should not be allowed. If SKUs aren’t available, training employees to look for signs of a fabricated or invalid receipt can help, although it won’t entirely eliminate the problem. 

Switching of Price Tags 

This kind of return fraud happens when a customer switches the price tag on an expensive item with one from a cheaper item, buys the item at a lower cost, and returns the item after switching the price tags back. This way, they end up pocketing the difference. You can prevent such frauds by training the employees to ensure that the item on the screen matches with the item being purchased when its scanned. 


Wardrobing Fraud 

Wardrobing fraud is when a customer purchases an item with the intention of using it a few times before returning it and passing it off as brand new. 

Think of someone purchasing an outfit specifically for an event. They have no use for the outfit beyond that event, so it ends up being returned despite being used. Wardrobing is often considered harmless by those who commit it, but it’s still fraud nonetheless. 
How to prevent it: Closely examining items when they’re returned for any signs of use can help here. Quality Check app by Saara uses artificial intelligence to detect any kinds of defects on returned items thus reducing chances of fraud to a great extent. Also, when talking about clothing, the use of tags that would make it difficult to wear the item without first removing the tag can stop fraudsters in their tracks. 

Returning shoplifted items 

Returning shoplifted items is a fairly self-explanatory tactic. The customer steals items in hopes of returning them at a later date for a refund on an item they paid nothing for. 
How to prevent it: Simply requiring a valid receipt for any return should be enough to stop these fraudsters in their tracks. 

When it comes to return fraud, there are many tactics used by fraudsters that retailers and other businesses need to watch out for. 
However, by taking certain steps and precautions, a significant amount of return fraud can be prevented. 

Normally, return fraud prevention begins with a clear and easily accessible return policy. By updating and revisiting your return policy, you can ensure that you’re giving yourself the best chance of preventing these tactics from being used on you. 

At the end of the day, these are the tactics to be on the lookout for along with some strategies to prevent them. Make sure you put them to good use and protect your bottom line. 

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