What Return Abuse Actually Costs Retailers (and How Detection Works)

Return fraud has grown from a manageable nuisance into a real line item. Fraudulent returns tripled in value between 2020 and 2025, and most retailers still have no systematic way to catch it before the refund is already issued.

Both figures are from National Retail Federation return-fraud reporting. In 2020, that same fraud rate was roughly 6% of a much smaller total returns volume — the growth is both in overall returns volume and in the fraud rate within it.

• Overstated-quantity returns — claiming more items were returned than actually were — the most commonly reported tactic.
• Empty-box or "box of rocks" returns — the package is returned but doesn't contain what was purchased.
• Decoy returns — counterfeit or lower-value items substituted for the original purchase.

These are pattern-detectable, not random — which is exactly why systematic detection catches meaningfully more fraud than manual spot-checks by a returns desk.

• Fraud Detection for eCommerce, From First Principles
• Coupon and Discount Code Abuse: How Leak Detection Works