By Shefali Kapadia
It’s not uncommon for a consumer to order the same shirt in three sizes, then return the two that don’t fit. But what happens when the consumer swaps the labels and returns different shirts, or buys a dress for an event, wears it once with the tag tucked in, then returns it?
These are examples of return fraud, a retail-industry risk that’s on the rise “in both scale and sophistication,” said Juan Hernandez-Campos, the chief operating officer at Happy Returns, a software company that manages returns and is part of UPS. Today, about 9% of returns are fraudulent, according to the 2025 Retail Returns Landscape report published by the National Retail Federation and Happy Returns last October.
With fraud a persistent problem amid growing return volumes, merchants can no longer rely on the “highly manual” methods they previously used to process returns, Campos said.
SHEFALI KAPADIA 