According to the National Retail Federation (NRF) techniques and processes put in place to thwart criminal activity around retailers’ return policies continue to be put to the test, and with steadily improving retail sales, even more is on the line when it comes to losses from return fraud.

NRF’s 2014 Return Fraud Survey polled senior loss prevention executives at 60 retail companies in October and November, 2014. Executives from discount stores, department stores, drug stores, supermarkets, apparel, home furnishings, auto parts and specialty stores and small stores completed the survey.  

The NRF release stated that the verdict is that the industry will lose an estimated $10.9 billion to return fraud this year.  The surveyed retailers estimate that $3.8 billion will be lost to return fraud this holiday season alone, up 11.8 percent from last year’s $3.4 billion. Overall, retailers polled estimate 5.5 percent of holiday returns are fraudulent, similar to last year’s 5.8 percent.

“Today’s sophisticated technology does well keeping criminals at arm’s length but often isn’t enough to completely stop the unethical practices of organized and individual retail fraud occurrences,” said NRF Vice President of Loss Prevention Bob Moraca. “Return fraud has become an unfortunate trend in retail thanks to thieves taking advantage of retailers’ return policies to benefit from the cash or store credit they don’t deserve. Additionally, many of these return fraud instances are a direct result of larger, more experienced crime rings that continue to pose serious threats to retailers’ operations and their bottom lines.”

Nearly all (92.7%) of the retailers polled in the survey say they have experienced the return of stolen merchandise in the last year, similar to last year’s 94.8 percent. In a troubling sign that organized retail crime continues to present significant challenges for retailers, more than three-quarters of those polled (78.2%) say they have experienced return fraud through returns by organized retail crime groups, up from 60.3 percent last year.

For more information on the survey visit www.nrf.com