Retailers Are Losing $100B Annually to Bots, Coupons and Return Fraud — Retail Bum

Losses arising from return fraud, bots, and coupon stacking are costing retailers a stunning $100 billion annually, according to a study published by fraud solutions provider Riskified.

The study, which is based on a survey of 300 companies with more than $500 million in annual revenue, found that policy abuses, such as return fraud (the act of buying multiple items with the intention of returning them after use) and the use of fake email addresses for promo codes, is increasing amidst high inflation and an incoming holiday season.

Other forms of fraud that have gained prominence include returning empty packages for a refund and using bots to buy highly valued, limited-edition products, only to resell them on another third-party platform for a higher price.

While many consumers today engage in different forms of friendly fraud to varying degrees, fraudsters are also increasingly taking advantage of lax policies that many retailers maintain to offer their customers a seamless experience.

In its survey, Riskified identified 137,000 fake accounts that some 4,000 customers created to take advantage of a 35% promo discount a retailer offers to first-time customers, costing the company more than $14 million every year.