This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: New research reveals retailers are losing money through two kinds of problematic returns: deliberate fraud and opportunistic abuse of generous return policies. The study, by professor Michael Townsley and Dr.
Andrew Childs of Griffith University and professor Joseph Clare of The University of Western Australia, showed retailers need to distinguish between outright deception, such as using fake receipts or returning stolen goods, and gray-area conduct such as wardrobing, in which a customer buys an item to use once before returning it. Lead author Townsley, from the Griffith Criminology Institute, said treating all returns misconduct as the same problem made it harder for retailers to respond effectively. "Fraud involves deliberate deception, whereas abuse is more often opportunistic behavior where customers bend the rules and rationalize it as harmless," Townsley said.
"That distinction matters because the response needs to be different. "Fraud prevention relies on better verification, integrated data and clear escalation procedures. Abuse prevention depends more on clear policies, consistent staff practices and helping customers understand the real costs of these behaviors." The research examined the scale and nature of returns misconduct through a customer survey, a scan of online fraud communities and a step-by-step analysis of how return fraud and abuse are carried out.
Townsley said wardrobing was a useful example of return abuse because many customers did not see it as serious misconduct. "Wardrobing is when someone buys an item, uses it once and then returns it for a full refund," he said. "Customers often justify this by telling themselves the retailer can simply resell the item, or that it was only a one-time thing, but retailers carry the cost of processing, inspecting, discounting or writing off those returns." The study also highlighted the role of online fraud communities, where people shared methods, scripts and advice for carrying out fraudulent returns.
Co-author Childs said these online spaces could make return fraud easier to learn and repeat. "We found online communities where people exchange detailed instructions for fraudulent returns, including what to say to retailers and how to avoid detection," Childs said. "Some of these spaces also operate like informal mentorship markets, where less experienced offenders pay for advice from people who have already worked out which methods are most likely to succeed." The report recommended retailers build three core capabilities before adding more hurdles to the returns process: stronger oversight of returns policies, integrated data from purchase through refund, and better support for frontline staff.
Once those foundations were in place, retailers could target fraud through stronger verification, risk scoring and escalation for repeat deception, while reducing abuse through clearer return rules, staff training and customer education. "Retailers do not need to make returns harder for every honest customer," Townsley said. "The better approach is to know which problem they are dealing with.
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