Since last year, the normalization of shoplifting in physical stores has taken over the Internet. On social media, hashtags like #mirtilar #cleptogirls or #cleptotwt point to content based on thefts of all kinds, which internet users proudly post. The idea of transgressing the system with petty thefts and even posting about it online has created an uncomfortable romanticization of a criminal practice.
And if this trend has gained ground on the internet, it would be a mistake to think that e-commerce would be free from similar practices. It’s not new to see consumers taking advantage of online retail by abusing stores’ commercial policies. However, according to Signifyd, a global e-commerce antifraud technology company, consumer abuse has been growing.
A frequent example of consumer abuse occurs in returns. This type of abuse consists of taking advantage of product return policies, a fair convenience created by e-commerce channels with significant investment in logistics and automation to facilitate the shopping experience.
There is a fine line between return abuse and return fraud, but both harm e-commerce as consumers and fraudsters exploit loopholes to obtain products for free or recover money improperly. Check out some maneuvers:
- Wardrobing: common in the fashion sector, the customer buys a product, uses it, and then returns it as if it were new.
- Bracketing: the customer buys multiple versions of the same product, tries them on, and returns the ones they don’t want, leaving the retailer with the shipping and processing costs.
- Fraudulent exchange: returning a counterfeit or damaged item instead of the original.
- Return chargeback: the customer requests a refund claiming they returned the product, but the retailer never receives the item.
- Empty return: sending a box without the product or containing an irrelevant object, like a brick or a potato, to bypass the refund system.
“Online retailers invest in technology and logistics to address return issues and thus retain customers with better shopping experiences. According to Signifyd research, by 2025, 7 out of 10 Brazilians will have needed to return a product. This is a movement that is part of e-commerce. However, this operation, which is already costly for e-commerce, becomes a serious problem when consumers take advantage to practice abuses, without imagining the scale of the damage that is accumulating,” analyzes Laís Lima, Signifyd’s Latam Marketing Director.
The impact on retail is significant: in 2023, global retailers faced return costs of approximately $700 billion; in the US alone, the loss was $103 billion. The global forecast is that this number will rise to $1 trillion by 2030, according to estimates by the National Retail Federation and Appriss Retail, which analyze the financial impact of returns in e-commerce.
Not all returns are malicious, and sometimes they may come from habits considered lawful by consumers, such as the aforementioned bracketing. “It’s difficult for online stores to track return abuse because it comes from legitimate customers,” explains Laís.
According to Signifyd research in Brazil, 9% of Brazilians have bought a product knowing they would return it, and 89% of them consider this movement normal.
“It’s difficult for online stores to track return abuse because it comes from legitimate customers,” explains Laís. “In addition, e-commerce must also deal with fraudsters who appear to be legitimate buyers due to the sophisticated methods they use, the lack of unified data and system intelligence, and the fear of harming the customer experience. A sum of factors that makes it very complex to avoid losses with online returns,” she adds.
These trends point to a new challenge for brands selling online: to decompress their business margins and improve growth opportunities, they need to balance innovation and fraud protection without harming the experience of good customers, who expect quick and hassle-free exchanges and returns.
Practices such as: clear and structured return policies; authentication of returns; and restocking fees for high-value products can help reduce scams. However, only monitoring return patterns that identifies consumers with a suspicious history of abusive or fraudulent returns makes e-commerce capable of detecting anomalous patterns and preventing abuse.
This monitoring is possible through AI-based solutions and data technology, which deliver intelligence on returns and proactive loss prevention actions. “An efficient return policy doesn’t just mean accepting returns without criteria. The use of technology is today the greatest ally in this major challenge of differentiating legitimate consumers from fraudsters and ensuring e-commerce protection without harming the customer experience, not only during the purchase but also post-purchase,” reinforces Laís.
