Understanding fraudulent returns and mitigation strategies in multichannel retailing

The growth of online retailing has exceeded expectations over the last few years. This has resulted in high product return rates, which retailers are struggling with due to complex and costly returns processing, logistics, and financial implications. Additionally, online returns come with increased opportunities for returns fraud. During the pandemic, new types of returns fraud have emerged and returns fraud rates have increased across all channels. Based on a series of semi-structured interviews with retailers and retail experts, we investigate factors that enable fraudulent returns from consumers' and retailers’ perspectives and outline strategies for retailers to combat product returns fraud in a multichannel environment, leading to a framework for retail fraud. We contribute critical insights to research and practices on understanding and addressing a growing problem that has economic, social and environmental implications.

•We explore various types of product returns fraud in a multichannel retail environment and categorise them.
•We indicate how common they are, whether they have recently emerged or changed, and in which channels they occur.
•We indicate which retailer related factors enable fraudulent returns and what interventions can reduce fraudulent returns.
•We present a framework for product returns fraud in a multichannel environment.
•The framework includes drivers of product returns related to retailers, customers, products, and external factors.