New Consumer Survey Reveals How Pervasive Returns Fraud and Policy Abuse Are Among Australia Retail Shoppers

Nearly 4 in 10 respondents say that either they, or someone they know, has engaged in returns abuse or fraud within the past year.

COLUMBUS, Ohio–(BUSINESS WIRE)–Loop, the leading return management platform for ecommerce brands, released the findings of its most recent consumer survey on return policy abuse and fraud. The data, collected from 1,000 Australian online shoppers, reveals what behaviours consumers consider to be fraud vs. abuse, and how often they engage in such behaviours.

Loop’s survey, conducted between November 22 and December 3, 2023, reached Australian consumers who had made a return in the last 12 months for an online purchase.

Key findings from the survey include:

• Nearly 4 in 10 Australia-based online shoppers (39%) admit to having either engaged in return policy abuse or fraudulent behaviours themselves in the past 12 months, or know of someone who has. The behaviours respondents were asked about spanned across outright fraud, return policy abuse, and other unfavourable return behaviours.
• Alarmingly, 23% of shoppers admit to engaging in these behaviours at a high frequency—saying they have worn or used an item while planning to return it at least once a week.
• A significant majority of online shoppers (79%) stated they had engaged in “bracketing” at least once — ordering multiple items to determine size/fit, with the intention of returning at least one item.

Return policy abuse, fraud, and other unfavourable return-related behaviours can exploit the return process, yet some of these behaviours are common and are not always considered by consumers or merchants to be abusive. These behaviours range from minor policy violations, to unfavourable behaviours that impact merchants financially, to outright illegal activity.

“Return policy abuse and fraud pose an enormous challenge to retail brands,” said Hannah Bravo, Chief Operating Officer at Loop. “At Loop, we’ve seen merchants begin to actively tackle this problem, evidenced by an overall decline in refund windows and an increase in quality inspection before issuing refunds. There is still so much more work to do to reduce the impact of returns fraud and abuse on merchants’ bottom lines while retaining their best customers. To achieve this, retail brands need partners with deep expertise and true customisation engines powered by broad data sets and machine learning.”

The survey included several additional insights into Australian consumer behaviour, including:

Consumers offer a range of stated reasons for engaging in these types of behaviours.

• Nearly two-thirds (62%) of Loop’s survey respondents say they did so to determine the size/fit of an item purchased, and around a third (31%) said they needed the money back they’d spent on an item.
• However, a significant number of respondents had less benign intentions, stating they wanted an item for a single event (32%).

Targeted strategies can reduce the impact of these behaviours.

• Loop found that charging a fee for returns would dissuade over a third of respondents (36%) from engaging in fraud or abuse.
• Since over half of online shoppers frequently engage in bracketing, providing more accurate size measurements or improved product images can go a long way toward deterring this unfavourable behaviour.

“Retail merchants are finding their profit margins under deep scrutiny in today’s environment, and returns are receiving dramatic focus,” said Jonathan Poma, CEO at Loop. “Because of this, merchants are increasingly seeking guidance to help them optimise their returns processes. There is no one-size-fits-all approach to returns, and each brand needs to understand their shoppers’ behaviour to craft a targeted strategy that reduces costly fraud while balancing the need for an exceptional customer experience.”

Visit the link here to view Loop’s full survey findings.

Click here to explore some of the ways Loop helps brands to reduce returns abuse and ensure a path to profitability: https://www.loopreturns.com/return-fraud/.

About Loop

Loop is the leading post-purchase platform optimizing returns, exchanges, and reverse logistics for 3,000 of the world’s most-loved brands. Through innovative features like Workflows, Instant Exchanges, Shop Now, and Bonus Credit, Loop helps brands unlock cost savings, increase customer lifetime value, and retain more revenue. Loop has processed over 40 million returns and counting. Learn more at www.loopreturns.com

Contacts

Walker Sands for Loop

loop@walkersands.com