2021 October

Policy abuse can cause retailers to lose more than 2% of their revenue each year, and yet only 46% of firms use internal technology to automatically identify repeat abusers, making it easier for unscrupulous customers to get away with fraud.

In Beyond eCommerce Fraud: How Retailers Can Prevent Customer Policy Abuse, a PYMNTS study done in collaboration with Forter, researchers found that 39% of retailers rely on manual review to identify repeat offenders, including over 63% of small firms making up to $250 million annually. Another 24% of companies rely on third-party technology, including 37% of the largest retailers.

The findings come from a survey conducted in late August and early September of 100 executives representing businesses in the retail sector that generate at least $100 million in annual revenue. The most common types of policy abuse include item not received (INR) abuse, in which a customer falsely reports theft or non-delivery of an eCommerce purchase; return abuse, when a customer returns items that are not eligible for return; and promotion abuse, when a consumer uses multiple accounts to take undue advantage of rewards, sales or other promotions.