Navigating Returns and Fraud Spikes in 2025

According to National Retail Federation (NRF), the total value of retail returns in 2024 was expected to reach $890 billion, equating to 17% of all merchandise sales in the US – an increase from 15% in 2023. The same report finds that 93% of retailers believe retail fraud and other exploitative behavior is a significant issue for their business.

The threat of returns and fraud attempts within the industry is nothing new. However, with numbers continuing to grow, retailers are understandably concerned. They must take swift action to mitigate the damage caused by both. Deploying the right technology, brands can effectively manage returns to maximize resale speed and ensure seamless experiences for both customers and in-store associates.

Managing Returns

Returns can be costly to a business and leave a huge impact. And this isn’t limited to the US. According to reports, in the UK, 11% of all returns in 2024 were from ‘serial returners’ – frequently buying and returning items – causing returns to reach a new tipping point, costing the industry £27 billion last year. A global challenge, the returns dilemma causes issues for retailers when slow reverse supply chains disrupt the operational effort behind returned items. Products often get lost or delayed, with poor visibility of stock completely disrupting the chain. The longer it takes for retailers to get products back onto the shop floor, the lower the item’s resale value. In some cases, items cannot be resold at all. Ultimately, the faster retailers can push their products through the return supply chain, the sooner they can be sold – and the better the sale price. 

Deploying RFID within stores with the correct order management systems (OMS) enables retailers to accurately track returned items. Item-level RFID provides brands with complete visibility of all products, including returned items. By reactivating tags when items are returned, retailers can accurately view products travelling through the supply chain. This visibility allows brands to see where products go missing, and where inefficiencies lie. In response, they can optimize the reverse supply to ensure items are returned to the shop floor quickly, maximizing new sales opportunities on returned products.

Taking this one step further, retailers can turn returns into additional sales opportunities, through clienteling. Teamwork Commerce’s clienteling tools, powered by Endear, utilizes data-driven CRM to offer seamless communication with clients, with the ability to provide product recommendations through customer purchase history. When customers return products in-store, retailers are presented with an additional interaction with consumers. Clienteling technology, implemented with mobile POS systems, equips retailers with useful information to turn in-store customer returns into sales opportunities off the back of creating a more personalized and enjoyable shopping experience – also strengthening customer relationships. Ultimately, retailers can benefit from not only creating efficient streamlined returns, but they can use these interactions to drive additional revenue from new sales.

Managing Fraud

Returns can feel messy and chaotic, but retailers need to remain vigilant, with the threat of returns fraud remaining a prominent issue within the industry.

When implemented with Point of Sale (POS) solutions, RFID technology can also help navigate in-store fraud attempts. Retailers who have adopted RFID into their operations will have all products marked with small, readable tags. When items are brought back for return, associates can check the tag to determine the origin of the product – where it was purchased from, and whether it has simply been lifted from a shelf without purchasing at all. The data within the tags can also show exactly when the item was purchased to ensure it was within the returns timeframe and speed up the process while detecting and mitigating any fraud attempts.

The Takeaway

To embrace 2025 in full force, it’s important that retailers take control of their returns process – and remain vigilant to fraud attempts. Implementing item-level RFID with the right CRM platform can empower brands to navigate this issue, maximizing opportunities around returns and minimizing successful fraud attempts.

To learn about how Teamwork Commerce’s solutions can help your retail brand navigate busy return periods and fraud spikes, get in touch today.