45% of Shoppers Now Say Return Fraud Is OK

Generous returns were supposed to buy trust. The logic is simple: if a customer knows they can bring an item back, they feel safer buying. The problem, according to new National Retail Federation data covered by Digiday, is that the same promise is quietly increasing fraud and operational waste.

Returns are a promise with a growing price tag

The NRF’s 2025 Retail Return Report estimates that 15.8% of total annual sales ended in returns, rolling back nearly $850 billion in 2025. Those losses jump during gift season: around 17% of holiday sales are expected to come back, and for online purchases routed through stores, the figure rises to 19.3%. With US holiday spending expected to top $1.7 trillion, retailers could face upwards of $170 billion in return-related losses this year.

These numbers are not just a supply-chain headache. They are a psychological signal. When return policies get more forgiving, consumers reframe what counts as acceptable. The same report found that 45% of consumers now consider it acceptable to stretch the truth if it secures a return. Nine percent of 2025 holiday returns were fraudulent, and 75% of retailers say the problem is getting worse.

The return counter’s blind spot

Why do these losses stay hidden? Most inventory systems rely on item-level RFID data, but the identifier usually disappears at the point of sale, just when the return risk begins. That missing link lets common fraud tactics thrive: overstated quantity claims, empty-box returns and item swaps, because the retailer cannot verify that the item at the counter is the one that left the store.

This is a classic control problem. Brands design policies for trustworthy customers, but policy language also advertises opportunity to those looking for easy money. The fix is not to punish every shopper; it is to make the return journey traceable.

Embed identity before the sale

Sensormatic Solutions, which sponsored the Digiday piece, points to embedded RFID tags placed in seams or brand labels at manufacturing. Each unit carries a unique identifier that survives the sale, so when an item reaches the return counter, the brand can verify its origin, movement and condition. A valid return can be scanned back into stock instantly; a suspicious one is easier to flag.

That visibility changes the marketer’s job too. Instead of treating returns as an unavoidable cost, brand teams can look for patterns: which products come back, from where, and under what story. It gives loss prevention teams a chance to reduce fraud without adding friction for honest shoppers.

What to do with this

• Treat return data as customer-behaviour data: it reveals uncertainty, sizing mismatch, and where the brand overpromised.
• Map the gap between what a shopper says and what the item ID proves; that gap is where fraud lives.
• Use permanent product identities to let valid returns re-enter inventory quickly, protecting margin and availability.

The brand lesson is sharper than just stopping fraud. Every return is a moment of truth, and if you are blind at that moment, you are paying twice: once for the return and again for the missing stock, labour and insight. Trust is still the goal, but verification makes trust affordable.

Source: Digiday