British shoppers are the most likely in Europe to engage in refund abuse, according to new research by fraud prevention platform Ravelin.
Their research, which surveyed over 6,000 consumers across the UK, France and Germany, found that over a third (37%) of British consumers have engaged in, or plan to engage in, refund abuse – higher than both France (33%) and Germany (25%).
More than one in four consumers (27%) openly admit to abusing refund policies – and a staggering 98% of those who attempt it get away with it.
What is refund abuse?
Refund abuse is the systematic abuse of a merchant’s return or refund policy for personal gain. Common forms of refund abuse include ‘wardrobing’(purchasing an item to wear once then returning it), item swapping (returning a broken/counterfeit version of the item instead of the new one received) and false delivery claims (claiming an item didn’t arrive in order to get a free replacement or refund). Online merchants are particularly exposed to refund abuse, given that goods are sold unseen and rely on a series of fulfilment partners to reach the customer.
Frequent abusers pose the highest risk to retailers. Ravelin’s research found that occasional abusers (once per year) report earning an average of €/£390 per claim, but the most frequent abusers (4+ attempts per year) gain an average of €/£491 per claim.
“A serious problem”
The research also shows that the problem is growing. Nearly two-thirds (60%) of refund abusers say they are doing it as often, or more often, than in previous years. AI is accelerating the problem as fraudsters use AI tools to generate fake images to falsify evidence.
The British Retail Consortium (BRC)’s advisor for finance, Chris Owen, says returns abuse is now “a serious problem which requires serious attention.” The BRC is working with retailers and others to tackle it.
“This is no longer a fringe behaviour,” said Martin Sweeney, CEO of Ravelin. “Our research shows refund abuse becoming more prevalent and normalised. People aren’t sneaking around the edges of policy anymore – they’re openly breaking the rules, sharing tips on how to cheat the system, and justifying it as fair game.
He added: “Merchants face a challenge to balance great experiences for good customers, while discouraging or blocking abusive behaviours.”
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research. Click here to subscribe to the FREE newsletter sent straight to your inbox. Why not follow us on LinkedIn to receive the latest updates on our research and analysis?
