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Combat the Growing Cost of Return Fraud

Return fraud is a growing cost for retailers, according to the National Retail Federation (NRF).

Recent research from the trade association shows that the average loss per return fraud incident is $1,766. That amount is higher than the average loss due to shoplifting, and is not far behind the average amount stolen in cases of employee theft, NRF reports.

The average dollar loss per shoplifting incident is about $800, and the average loss per dishonest employee is approximately $1,900, according to NRF.

Small businesses that struggle to combat return fraud can implement a combination of the following strategies, if they haven’t already. CNBC compiled the following list based on return policies from big-box retail stores.


  • A receipt for every return.
  • Product packaging to be fully intact.
  • Short time frames allowing for turns.
  • A form of identification from every customer making a return, so you can watch for repeat offenders.

If a customer doesn’t have a receipt, offer

  • Exchanges only.
  • Store credit, instead of gift cards that can be used online.

Source: CNBC

About Kate Klein

Kate is profiles editor for Hardware Retailing magazine. She reports on news and industry events and writes about retailers' unique contributions to the independent home improvement sector. She graduated from Cedarville University in her home state of Ohio, where she earned a bachelor's degree in English and minored in creative writing. She loves being an aunt, teaching writing to kids, running, reading, farm living and, as Walt Whitman says, traveling the open road, “healthy, free, the world before me.”

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