The Ninth Annual Report from The Retail Equation uncovers staggering numbers regarding 2013 merchandise returns in comparison to last years loss prevention awareness trends.
The study found that merchandise returns in 2013 cost U.S. retailers more than $267 billion in lost sales and in fact, if viewed as a company, this would rank third on the Fortune 500 and higher than household names such as Chevron, General Motors and General Electric. Due to the great loss of profit, return fraud cost retailers and workers between 331,000 and 595,000 jobs last year alone.
The study also showed that retrail fraud and abuse accounted for $9.1 billion to $16.3 billion in the United States, an increase of 2.6 percent from last year and overall retail revenue losses are currently costing states a total of $549 million to $989 billion in lost sales taxes.
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If your company doesn't utilize a product like The Retail Equation, there are still some best practices you can do to reduce the potential for return fraud.
Management verification of refunds (matching slips to register totals)
Store Management validation (calling customers to verify they returned merchandise)
Store audits by District Management or LP to review store operational compliance to P&P
Data analysis of credit card or stored valued cards (merchandise return cards) involved in returns (multiple use of same credit cards, multiple SVC to same customers)