E-Receipts Contribute to Return Fraud Rates

Amberly Dressler — Mon, 10 Dec 2012 16:45:00 GMT

As retailers race to provide a seamless multichannel experience for consumers, there is one area for concern – e-receipt return fraud.

The term mutlichannel (or omnichannel) is more than a buzzword. Today’s consumers are accessing retailers via a variety of channels – in-store, mobile, tablets, online and through social media – and they expect to be able to have the same customer service interactions (including questions and returns) via all of the brand’s properties. This is why retailers are allowing consumers to purchase an item online and return it in-store. Criminals, however, are finding ways to beat the system.

For the first time, NRF’s Return Fraud Survey asked loss prevention executives about return fraud with the use of e-receipts, and nearly two in 10 (19.3 percent) reported they have dealt with e-receipt return fraud. As online sales continue to grow, 86.0 percent said they allow customers to return merchandise purchased online in their stores, and retailers estimate 3.9 percent of those returns are fraudulent.

“Many shoppers love the convenience and flexibility that digital receipts offer them, and unfortunately criminals are finding ways to manipulate them,” said NRF Vice President of Loss Prevention Rich Mellor. “Return fraud in any form is a serious threat, and we know that retailers have made significant strides in their fight against retail crime, and are continuing their efforts working with law enforcement to address this multi-billion dollar problem.”

With the holidays in full swing, there will undoubtedly be more returns to handle. However, most survey respondents (83.1 percent) said their return policies will remain unchanged compared to last holiday season, and 10.2 percent reported they will actually loosen their policies to help ease the process for gift givers and recipients.

Even so, return fraud is a big problem, one that costs retailers billions of dollars every year in the form of criminals who return stolen merchandise, use counterfeit receipts, or even return items already worn and/or used that are not defective.

According to the aforementioned survey, completed by loss prevention executives at 60 retail companies, the industry will lose an estimated $8.9 billion to return fraud this year, and $2.9 billion during the holiday season alone. Overall, retailers estimate 4.6 percent of holiday returns are fraudulent.

This problem forces many retailers to adopt policies that require customers returning merchandise to show identification (73.2 percent of respondents said they require ID when no receipt is present). Additionally, retailers estimate that 13.4 percent of the returns made throughout the year without a receipt are fraudulent.

There are plenty of ways to reduce the sting of returns, but they typically apply to those consumers who play by the rules.

1. Set a Return Policy

According to Brian Horakh, the founder and CEO of e-commerce software provider Zoovy, return management can make or break a midsize retailer who is trying to grow their business. Yet, many retailers have not seriously evaluated their return policies. It’s imperative to have a clear returns plan in place. And this can be as part of an overall shipping strategy, too.

2. Integrate a Virtual Fitting Room

In the brick-and-mortar world, it is common to take 10 garments into a fitting room and only come out with one that fits. For the Web, this means that when consumers don’t physically try on clothes, the likelihood of them returning the item (whether in-store or through shipping), is sky high. There are new technologies, however, that attempt to remedy this problem by providing e-commerce retailers with “virtual” fitting rooms. These technologies can lower return rates by nearly 30 percent. Read about three of these virtual fitting room platforms.

3. Take the Path to Least Resistance

White-hat consumers pay the price for the return fraud detailed above. It’s not uncommon to feel like a criminal when trying to return something online or in-store. While it’s important to set a clear return policy, it’s also equally imperative to treat customers fairly. In 12 months, they may not remember what they tried to return, but they’ll remember how your associates made them feel. Try to make returns and customer service as easy as possible, and your consumers will remember the experience and return to your business. Here are more tips for the e-commerce holiday season.

Give Shoppers a Better Fit this Season

Amberly Dressler — Mon, 19 Nov 2012 21:15:00 GMT

Even with holiday shopping in full swing, online apparel retailers still have time to reduce returns and increase customer loyalty by helping consumers ensure a better fit before orders are placed.

Clothes Horse, a company in the fit guidance solution space, is one way how. The idea behind it is that the company’s technology enables shoppers on retailer sites to purchase the right products with confidence, creating a better, more predictable shopping experience. To do this, customers are asked body-specific questions and questions about the fit of their favorite brands, to get a Clothes Hourse recommendation (telling them what fit works best).

Furthermore, the company’s recently announced partnership with BrightTag, which enables Clothes Horse to provide instant activation of its fit and sizing widget for any BrightTag retail partner.

“BrightTag’s focus on performance is critical to what we see in the market, and their approach to tag management and real-time data integration has all of the right benefits for our retail partners,” said Vik Venkatraman, Co-Founder of Clothes Horse. “With our strengths combined, our mutual partners are going to have a serious leg up.”

BrightTag works with many of the world’s top retailers, such as Levi’s, Old Navy, Crate & Barrel and more. It’s important to note, however, that while BrightTag connects clients with tech partners, the actual connections a client makes are up to them.

New technologies like Clothes Horse are evolving the Internet. To read more about the tech state of e-commerce, check out this article here.

'Net Features : virtual fitting rooms

E-Receipts Contribute to Return Fraud Rates

Give Shoppers a Better Fit this Season