Everything You Need to Know About Refunds Abuse

Executive Report

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There is a new form of fraud that’s on the rise. Learn how Accertify’s solution helps retailers fight refunds abuse.

Refunds abuse occurs when a customer places an order, receives the goods and then fraudulently claims to have not received the shipment. It places merchants in a difficult position because they must decide whether it’s better to write off the loss as a cost of doing business online or implement more controls to check orders and run the risk of angering legitimate customers.

Most merchants are familiar with returns abuse because customers have been taking advantage of companies’ return policies for years by returning used and damaged items. According to a survey conducted by the National Retail Federation, the average retailer incurs $106 million in merchandise returns for every $1 billion in sales. And for every $100 in returned merchandise accepted, they lose $5.90 to return fraud. 

A main reason refunds abuse goes undetected is because there is a lack of objective data to help identify fraudulent refund requests. If the customer and transaction are legitimate, there is no reason to think that a crime has been committed. A merchant may know something is amiss because there is an increase in lost or stolen package claims. but refunds abuse is difficult to prove and even harder to prevent.

Accertify’s Refunds Abuse Protection uses machine learning, user behavior analytics and device intelligence to detect fraudulent refund requests

Download this Executive Report to learn how to fight refunds abuse.