For many retailers, January isn’t just the first month of the year: It’s “return season,” when customers bring back their unwanted holiday gifts for refunds or exchanges. Return season can be fraught for businesses if, for example, a higher percentage of gifts are returned than stores expect. According to the National Retail Association, consumers are expected to have returned more than $816 billion of merchandise (almost 17% of goods sold) in 2022. Another major risk is retail return fraud. This is when customers trick stores into issuing illegitimate refunds. If you’re in retail, you must be proactive to discourage these schemes. Cash transactions Return fraud perpetrators could be customers, employees or even a criminal gang working with employee accomplices. In perhaps the most common scheme, an individual steals...
