Signifyd, a leading card not present fraud prevention solution, announced a new return abuse prevention solution. Return abuse fraud is when a fraudster uses a merchant’s returns policy to commit fraud. Unlike other types of eCommerce fraud, it does not occur at the point of sale. Signifyd stated the problem costs merchants $43 billion.
In the press release announcing the launch, Gayathri Somanath, Vice President of Product at Signifyd, highlighted the increasing scope of the problem, as well as its unique characteristics, as key motivating factors behind launching a dedicated return abuse prevention solution.
“Unfortunately, fraudsters and a subset of consumers are becoming more aggressive and ingenious when it comes to taking advantage of return policies meant to make life easier for shoppers,” he said. “Return Abuse Prevention relies on Signifyd’s network data, machine learning models and our new Decision Center module to give retailers the tools they need to stay ahead of this increasing, revenue-crushing trend.”
Return abuse fraud affected Research from the National Retail Federation and Appriss Retail estimates 7.5% of returns of online retail sales were fraudulent in 2020. However, preventing return abuse fraud must not result in a poor customer experience. Research from Upwave found that a poor customer experience would cause 75% of consumers to be likely stop buying from a brand.
Steven Borrelli, CEO of direct-to-consumer apparel brand and Signifyd customer Cuts, stated the increasing emphasis on the return abuse vulnerability by frausters gives retailers no choice to but to find a solution that balances prevention with customer experiences.
“When you have no safeguard or security check, it becomes clear to fraudsters and abusers that you are an easy target. It’s as if the word had gotten out and they were telling all their friends and associates to go hit up Cuts,” he said.