Returns Abuse Annually Costs U.S. Retailers $24 Billion
NEW YORK-Wednesday 25 March 2020 [ AETOS Wire ]
(BUSINESS WIRE)-- Forter, the leader in e-commerce fraud prevention, today announced the release of Forter Returns Abuse Protection. The new solution enables merchants to identify and block abusive returns practices, allowing merchants to confidently offer competitive policies their shoppers expect.
38% of online shoppers indicate that return policies have a major impact on their decision to purchase from any retailer. Nearly 1 in 4 have abandoned a shopping cart due to poor returns options, and 31% of consumers would not shop again at a retailer following a difficult returns experience. Merchants offer liberal returns policies to satisfy rising consumer expectations in an increasingly competitive market.
With 10% of all items sold in the United States returned, merchandise returns are forecast to cost American retailers $550 Billion in 2020. Fraudulent returns comprise a significant percentage of this sum, costing retailers $24 Billion annually, according to research published by Appriss.
“Well-established retailers are curtailing or altogether eliminating their flexible returns policies because of the cost of abuse. It’s very unfortunate that a few people can spoil a terrific consumer experience for everyone,” said Michael Reitblat, CEO and Co-Founder of Forter. “With Forter retailers can now proactively and fairly enforce their online returns policies, and still deliver a best-in-class experience their loyal customers expect.”
Returns abuse impacts merchants in a variety of ways:
Lost Revenue: Abusive returns remove inventory from stock that could have been sold to legitimate customers. Additionally, only 50% of returned items can be resold at full price due to product wear and tear.
Operational Overhead & Costs: Costs associated with processing returns, restocking inventory and shipping cut into overall profit.
Degraded Customer Experience: Returns abuse can make it financially unfeasible for a merchant to support a customer-friendly returns program, which results in a poor customer experience and also reduces the lifetime value of new and existing customers.
Consumers use different means to take advantage of returns policies:
“Wardrobing” or “Free Renting”: Abusers purchase an item, use it once, and return the item for a refund. Most commonly associated with apparel, this practice extends to other types of items as well.
High Return Rates: Consumers return a high percentage of orders back to the merchant, using different cards and addresses to hide the practice.
Returns Fraud: Abusers return a different, often less valuable, item while collecting the value of the original item.
Appeasements: Consumers initiate multiple or false complaints about the quality of an item for a discount or refund.
Risk-free inventory: Resellers buy inventory at promotional prices to sell at full price, then return unsold inventory.
“Returns abuse is a major challenge for retailers. It impacts profitability and threatens their ability to provide a competitive customer experience,” said Vikrant Gandhi, Industry Director at Frost & Sullivan. “Forter’s Returns Abuse Protection enables merchants to accurately identify abusers, both online and offline, so they can offer consumer-friendly policies. With the collective intelligence of its Global Merchant Network, Forter analyzes consumer behavior across all customer touch points to identify and stop abuse.”
Forter’s Returns Abuse Solution provides merchants with:
Approve/decline decisions at every transaction, enabling merchants to block returns abusers from placing more orders that will likely result in additional returns.
Approve/decline decisions at every returns initiation, at the point of the returns request (e.g. online, call center agent).
Flagged suspicious accounts, enabling merchants to enforce policies at the account-level; for example, making repeat abusers ineligible for free returns shipping or only allowing in-store returns.
Full dashboard, Track returns KPIs with an in-depth view of return data from a single, easy-to-use dashboard.
Forter’s Returns Abuse Protection is part of its broader Policy Abuse Protection offering, protecting merchants against item-not-received abuse, promo/coupon abuse, reseller abuse and reshipper abuse.
Read more at forter.com
About Forter
Forter is the leader in e-commerce fraud prevention, processing over $150 billion in online commerce transactions and protecting over 620 million consumers globally from credit card fraud, account takeover, identity theft, and more. The company’s identity-based fraud prevention solution detects fraudulent activity in real-time, throughout all online consumer experiences.
Forter’s integrated fraud prevention platform is powered by its rapidly growing Global Merchant Network, underpinned by predictive fraud research and modeling, and the ability for customers to tailor the platform for their specific needs. As a result, Forter is trusted by Fortune 500 companies to deliver exceptional accuracy, a smoother user experience, and elevated sales at a much lower cost. Forter was recently named the Leader in e-Commerce Fraud Prevention by Frost & Sullivan.
Forter is backed by $100M of capital from top-tier VCs including Sequoia, NEA, and Salesforce.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200324005165/en/
Contacts
Jake Schuster
fama PR for Forter
P: 617-986-5021
E: Forter@famapr.com
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