What Is Return Abuse? Return Fraud’s Costlier Cousin

Published:
April 15, 2026

Reading time:
4 minute read

Written by:
Forter Team

A customer buys a dress on a Thursday, wears it to a wedding on Saturday, and drops it off for a return Monday morning: tags back on, folded neatly, exactly as it arrived. Technically, nothing violated your return policy. In reality, you just funded someone’s outfit for the weekend.

That’s return abuse. Roughly 19.3% of eCommerce purchases are returned and 15% of those are fraudulent, according to Appriss Retail data. Those numbers don’t sound big, but they totaled $100 billion last year.

Return fraud and return abuse are often used interchangeably. The more the problem scales, the more the distinction matters. Understanding the difference is the first step toward doing something about it.

What Differentiates Return Abuse from Return Fraud?

Return fraud is the criminal end of the spectrum. It involves deliberate deception: fabricating receipts, returning shoplifted items, switching price tags to pocket the difference. These are schemes. The intent to steal is unambiguous.

Return fraud takes several forms, most of which have been around long before eCommerce:

• Receipt fraud: Submitting an old, stolen, or fabricated receipt to return ineligible merchandise
• Price tag switching: Buying an item at a manipulated lower price, then returning it at full value
• Returning shoplifted items: Stealing merchandise and attempting to return it for cash — most effective in stores that don’t require a receipt
• Shoplisting: Using a found or stolen receipt as a shopping list, gathering those items, and returning them without ever purchasing them

Return abuse, on the other hand, often doesn’t look like fraud at all. That’s exactly what makes it harder to stop. Actions under the return abuse umbrella include:

• Wardrobing: Purchasing an item, wearing and using it, and then returning it for a refund
• INR abuse: Falsely claiming to have not received an item
• False returns: Sending back damaged, incomplete, or entirely wrong items
• Empty box returns: Returning empty boxes to receive a refund

According to the Merchant Risk Council, 57% of merchants reported increasing rates of refund and policy abuse over the past year, driven largely by false INR claims and returns of used or damaged goods. Return abuse is no longer a fringe behavior. It’s become so normalized that the National Retail Federation found that 62% of customers admit to abusing return policies.

They may not think of themselves as doing anything wrong, but the impact on the merchant is the same.

What Is Driving the Increase in Return Abuse?

The classic forms of return fraud haven’t gone away. Wardrobing, false INR claims, and empty box returns are all still alive and well. Technology has simply made them easier to pull off at a much higher scale.

Gen AI has lowered the barrier dramatically. Anyone can now doctor a receipt or generate convincing “damage” imagery — torn fabric, cracked cosmetics, deformed batteries — to support a fraudulent claim. Forter’s 2025 Cyber Month report shows that AI-generated damage is the fastest-growing form of return abuse. The MRC report also found that 22% of merchants saw refund and policy abuse increase by at least 50%.

Sophisticated fraud rings have industrialized the practice, in some cases offering returns as a service in exchange for a cut of the proceeds. Casual abuse has also become almost routine among everyday shoppers. Loop Returns found that 30% of customers who engage in wardrobing do so weekly. Weekly. These aren’t isolated incidents as much as they’re habits.

The Hidden Costs Most Merchants Underestimate

Ask a merchant what return fraud and abuse costs them, and most will point to the refund and the cost of goods. Those are the most obvious numbers. They’re also the tip of the iceberg.

Consider what actually happens when a fraudulent return comes through. Someone in the warehouse packed that order. A customer service rep fielded the claim. Logistics costs were incurred shipping the item back. If the item came back damaged or unusable, it can’t be restocked. That means you’ve also lost the margin you would have made selling it to a legitimate customer. If the claim escalates, it may come back as a service chargeback rather than a standard refund, adding another layer of cost.

Then there’s the less obvious hit: over-restriction. When merchants respond to abuse by tightening policy across the board, they inevitably catch legitimate customers in the net. There are the parents buying children’s clothes in multiple sizes, customers who received a damaged item, and the people whose packages really were stolen.

Those customers don’t come back. According to NRF data, 37% of merchants who introduced return fees reported losing customers as a result.

How to Calculate Your Return Abuse Rate

Return abuse is a bigger problem than most merchants realize — and a more solvable one than it seems. Forter’s new return abuse guide walks you through how to quantify your true cost of abuse with an assessment that uncovers the hidden costs and how much revenue you can recoup. Check it out here.