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The Inside Dirt on Returns Fraud

Online retailers face difficult challenges when it come to dealing with returns fraud.  Fraudulent returns can range from incredibly sophisticated schemes of well resourced criminals to the simplest rip-offs one might imagine.   Simple as dirt, really.

  • Dirt simple
  • Don’t complicate returns
  • Technology trumps manpower

Playing dirty

This is not breaking news, but if you haven’t heard such stories, they will leave you scratching your head.  Until recently returns processing has been a brute force, manpower intensive. With the sheer volume of returns, etailers typically can’t evaluate returned merchandise as quickly as their refund policies demand.  Among the simplest ways to evaluate a return has been to simply weigh the shipment in it’s transport packaging; if the return weighs the same as when it was shipped to the customer, it’s an initial indication that the product shipped is what has been returned.  Criminals have used this knowledge to defraud online retailers by noting the weight of their order, unpacking the contents, and then filling the package with dirt to match its original weight, and finally, requesting a refund.  One such perpetrator used this method to defraud  Amazon of  $370,000 in fraudulent returns.

Easy returns = $ales

Liberal returns policies that make it easy for honest consumers to return merchandise, keep etailers competitive and their customers happy.  Stringent returns policies are no answer to returns fraud.  Cart abandonment, when shoppers load their favorite items into a cart and fail to follow through with the purchase,  is a critical eCommerce metric. Tighten returns policies and watch cart abandonment go up.  it’s that simple.  But that doesn’t mean it’s not worthwhile to combat returns fraud, which exceeds $7 billion annually in the U.S, and is only trending upward.

It ain’t rocket surgery, it’s X-ray!

In an environment of increasing wages and labor scarcity, it’s just not practical to throw more manpower at this problem. Instead, how about equipping your team with the most advanced reverse logistics tool available anywhere?   Incorporating automated X-ray inspection with artificial intelligence into their reverse logistics is how the largest players in eCommerce are combating returns fraud.  We know this because we helped developed and build these systems.  TruView™ X-ray systems capture images, through primary, secondary, and even transport packaging almost instantaneously.  AI then evaluates the image based on expected contents informed by a barcode scan, putting the brakes on dirty returns.   This technology dramatically reduces returns backlogs, saves substantially on labor costs, and allows fraudulent returns to be caught at the earliest possible point is the reverse logistics process.

Ready to learn more?  Please reach out to learn how Creative Electron can revolutionize your eCommerce returns process.

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