What it is and why it’s so hard to catch & control
Return fraud is a multi-pronged issue cropping up in many
industries, affecting companies’ profits, inventory, and in
the cases where counterfeit products are involved, their
reputation. Return fraud is the practice of returning
products to a merchant that violate the merchant’s return
policy, and claiming an invalid refund as a result.
Consumers have long taken advantage of leniency in
return policies, as well as the relative ease and anonymity
of submitting returns online. But there are many ways
return fraud manifests itself. One of those ways is through
the purchase of a counterfeit product and returning it for
the refund amount of the real thing. Not only does this
cost companies money, but once counterfeit products
make it into mainstream circulation, the inventory pool
becomes contaminated with illegitimate products. This is
just one of many ways illegitimate products enter the
supply chain, and in many industries, these contamination
points can be dangerous. Counterfeit products often
aren’t held to the same safety and quality control
standards as the real product and can pose safety risks
to unassuming buyers.
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