New research explores the importance of returns for customer loyalty and how retailers can strengthen relationships while mitigating return fraud
Appriss Retail, a leading provider of data and analytics solutions designed to reduce retail losses, decrease returns and claims fraud and abuse, and provide a more seamless consumer experience, announced the release of a new report in partnership with Retail Dive, “How Important Are Returns to Customers?” that explores how retailers are contending with returns, the impact of returns on consumers’ shopping decisions, and how retailers’ return policies are holding them back.
“Making a policy too strict can have consequences that really hurt retailers”
With original research driven by Retail Dive surveys of 150 retail executives and 1,000+ North American consumers, the report shines a spotlight on the problems returns fraud poses for retailers and the efforts they are taking to address it. In fact, the report found that 84% of retailers have made changes to their returns policies to decrease returns fraud within the last year.
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By focusing on adjusting their policies, however, retailers are putting customer satisfaction and retention at risk. The Appriss Retail research found:
- 55% of consumers report that they have decided not to buy from retailers or ecommerce stores due to the restrictions of their return policies.
- 36% of consumers report that they have had at least one negative return experience.
- 31% of consumers report that they have stopped shopping at certain retailers or ecommerce stores due to negative return experiences.
Despite this, retailers believe they are getting returns right — with 99% of retail executives respondents saying that their consumers are satisfied with their return experiences.
“Making a policy too strict can have consequences that really hurt retailers,” says Pedro Ramos, Chief Revenue Officer at Appriss Retail. “Take a ‘no receipt, no return’ policy — while it may deter fraud, it can also alienate loyal, high-value customers. That’s why Appriss Retail’s AI-powered solutions offer retailers protection from returns abuse by delivering unbiased, real-time recommendations. By analyzing a consumer’s return history, we help retailers make smarter decisions on returns, claims, and appeasements — without jeopardizing consumer relationships.”
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Claims and appeasements fraud — which occurs when shoppers file fraudulent claims that purchased items were damaged, defective, or not received, in order to receive credits or cash back from retailers — is a rising problem area. According to 2023 research from Appriss Retail, retailers spend between $21 billion and $35 billion on claims and appeasements alone — of which $2.2 billion to $3.7 billion is fraudulent (10.5%).
Other common types of returns fraud or abuse reported by retailers include returns using counterfeit receipts or e-receipts (48%), bracketing or customers buying items in multiple sizes/colors with the intention of returning some (47%), and employee returns fraud and/or collusion with external sources (39%).
By using AI-driven technology to tailor returns experiences based on their unique shopping histories, retailers can drastically reduce returns fraud while also facilitating more positive returns experiences. In the Appriss Retail study, nearly 90% of consumers report they would be more likely to make additional purchases from certain retailers or ecommerce stores if they were to have a positive returns experience with those brands.
The full Appriss Retail research report provides retailers with expert insights into driving down fraud and abuse without compromising consumer satisfaction.
