A growing number of consumers are taking advantage of lenient return policies to engage in return fraud and abuse. Bill Stewart, owner of LI Toy and Game on Long Island, estimates that he loses $55 per incident due to customers returning items in poor condition. This phenomenon has become a major headache for small businesses like Stewart’s, which struggle to compete with big-box retailers offering more generous return policies.
The rise of online shopping has made it easier for consumers to exploit return policies. A recent report found that 15% of merchandise returned in the US was fraudulent, resulting in losses worth $103 billion. Retailers are taking steps to crack down on this practice, including axing free returns and implementing stricter return windows.
David Morin, vice president of client strategy at Narvar, notes that consumers often feel entitled to engage in return abuse due to social training. “Consumers who would never go into a physical store and take an item off without paying and stealing are actually being trained socially that it’s okay to take advantage of retailers in these small ways,” he says.
The issue is not limited to organized crime. Everyday consumers, including those with good intentions, can also engage in return abuse. A survey by Narvar found that over half of US consumers admitted to engaging in fraudulent returns at least once. Jessica Meher, senior vice president of marketing at Loop Returns, notes that this behavior is often driven by a mentality that consumers feel entitled to do so.
As retailers adapt to the changing shopping landscape, personalized return policies are becoming more common. Companies such as REI and ASOS have started banning certain customers over repeat return abuse. The goal is to incentivize good customers with lenient return policies while discouraging bad actors from exploiting these policies.
The rise of return policy abuse highlights a broader issue in the US consumer economy: an us-versus-them sentiment between companies and their customers. Many consumers feel that businesses are taking advantage of them, leading some to engage in retaliatory behavior. As retailers navigate this complex landscape, it is essential to strike a balance between providing lenient return policies and protecting themselves from abuse.
Source: https://www.businessinsider.com/return-fraud-amazon-shipping-retail-theft-wardrobing-online-shopping-2025-7