THE TAG BLOG
The rise of fraudulent returns and how to prevent them
MARCH 9 2020
THINK WEAR AND RETURN, WARDROBING, SNAP AND SEND BACK AND COUNTERFEIT PRODUCT SWITCHES
With FedEx predicting that e-commerce will rise from generating 50 to 100 million packages in the US by 2026 it got us thinking about the impact this rise will have on returns. The National Retail Federation (NRF) reports that 30% of all online purchases are returned which if predictions are met will total 333 million annually and up to 8%, or 4.16M, of those being fraudulent returns.
The environmental impact alone will be staggering
Preventing items sold online going out for a night on the town and being returned. Shown here is the Classic Loop Pack - 22mm.
SO WHAT'S THE PROBLEM WITH RETURN FRAUD?
What is concerning to those of us in the e-commerce space is what happens to the 333 million items during the return window which can extend out to 30 sometimes 60 days and beyond. The item sold has traveled far and wide, possibly to another country, been in the hands of the buyer, sometimes for weeks, and then travels back to you.
How are we to know where the item has been during that time, what parties did it attend or whose Instagram account did it get posted to for an ‘outfit of the day’?
These return fraud practices have become so common place they now have their own hashtags #snapandsendback #wearandreturn #wardrobing and have caught the eye of companies like ASOS who are tracking social media accounts and banning serial returners.
Curtailing these increasingly brazen consumer behaviors involving fraudulent returns must be top of mind for those in the apparel business like I am on ebay. The anonymity of online shopping has emboldened consumers to behave unlike they would in a retail store where coming face to face with a store associate puts a different perspective on deception.
I was reminded how easy this practice of wear and return or wardrobing can be when I purchased an item online recently. The sweater was supposedly new, hopefully unworn but the tag was attached by a safety pin so I can’t be 100% sure. Take a look and be the judge! Safety pin tags are commonly sort out by consumers looking to engage in return fraud because the original tag is so easy to reattach.
Safety pin tags are sort out by serial returners as they can easily put the tag back on in order to return the item
SERIAL RETURNERS HAVE MANY TRICKS
Manufacturers are adding to this uncertainty by using these types of designer tags attached with pins or dainty ribbons looped around the item’s label. This must be a dream come true for would be return fraudsters, or serial returners because who would ever know if the item was worn or not, other than the perpetrator themselves... and maybe their Instagram followers?
Even items tagged with a traditional plastic barb aren’t safe from being worn and fraudulently returned. Abusing the returns honesty system can be done with a 1000 barb tagging gun kit purchased on Amazon for $4.69 plus $0.99 shipping. This allows the dishonest buyer to easily, and repeatedly, replace tags that have been cut off for just half a penny a time.
WHAT RETURN FRAUD STRATEGY TO EMPLOY INSTEAD
It took us accounting for all the scenarios of returns abuse to design the 360 ID Tag. We wanted to create a flexible system where the return tag material can be cut to length and simply secured with a tamper-evident security seal. Buyers also can’t be armed with their own supply of 360 ID Tags to replace the one cut off and falsely claim it was not worn. The additional security feature of unique serial numbers on the seals stops this return fraud practice and allows you to cross check what you sent out is what you receive back.
Counterfeit product switches are just another aspect of fraudulent returns that are becoming easier to pull off as was highlighted in a recent Marketplace investigation due to the proliferation of fakes on Amazon, AliExpress, eBay, Walmart and Wish. By taking proactive steps against consumer abuse, sellers can take control of their merchandise because the only buyers backing away from secure return tags are the ones looking to commit fraud.
Want to talk return tags, have questions, or need some advice? Add a comment below, or send me a message at email@example.com and I’ll be happy to help you out.
CHELSEA DUHS - FOUNDER 360 ID TAG
Choose a 360 ID Tag Pack to suit your business
We offer 4 different 360 ID Tag packs with varying combinations of return tag material and tamper-evident security seals; or you can build your own combination. Have a look at the 360 ID Tag products and choose the return fraud solution that suits the types of products that you sell online.
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Shoes are a prime target for return fraud, whether being worn and returned or switched for a counterfeit and returned. Shoe sellers who are adding a 360 ID Tag to their merchandise are warding off dishonest customers before they purchase simply by adding a visible return tag.Read more