A new criminal threat is exploiting reverse logistics, and retailers can’t always see it coming, writes Liselotte Reijrink, Sales Director UK & EU, ReBound Returns.
Retailers have poured resources into fraud prevention at the ecommerce checkout stage, with identity checks, authentication, and risk scoring all fairly standard. Unfortunately, fraud hasn’t disappeared, it’s just moved through the supply chain and is now targeting returns.
Operations and logistics teams are already handling increasing numbers of retail returns. Now, with more and more items sent back fraudulently, the operational burden on quality control practices is heavier, and it’s threatening the overall productivity and performance of reverse logistics processes.
At ReBound Returns, we analysed one million returned orders processed for retail clients between July 2025 and May 2026. We found £29 million worth of potentially fraudulent returns in that sample alone. It represents more than financial risk. It’s a signal that reverse logistics operations are being deliberately targeted, and the systems that retailers rely on weren’t built to catch it.
Online return rates are now close to 20% of sales, and in the USA alone that market is worth nearly $850 billion. The Merchant Risk Council currently ranks refund and returns policy abuse as the most common fraud type faced by merchants. As fraud rates scale, so does the additional pressure on the teams processing the items. More parcels need more thorough inspection, which takes more time and more warehouse space.
Why it’s hard to see returns fraud coming
Many returns are refunded before anyone physically inspects them. At the same time, customers don’t see returns fraud as a serious issue. Cifas, the UK fraud prevention service, found 17% of adults don’t think fraudulently claiming a refund is illegal. Among 16-24 year olds, more than a third said they’d be willing to do so. Without the right systems in place, most retailers have no way of knowing how exposed they actually are.
There are clues in the data if you know what to look for. For example, our research found that lead time is one such signal; a normal return has a median gap of 9.5 days between delivery and returns, but that jumps to 18 days for returns flagged as potentially fraudulent. Location is another signifier, with Poland and Denmark scoring the highest fraud rate in our dataset. Unfortunately, the data that would help to catch the problem is often spread across different systems, stores, and third-party marketplaces, none of it talking to each other. Operational teams are forced to make decisions without a clear view of what is coming back to the warehouse.
Tackling fraud without slowing returns management down
Standard returns systems weren’t built for the scale and sophistication of modern returns fraud. Most rely on static rules and manual review, with limited ability to predict behaviour or flag risks before a refund is issued. The operational cost of catching fraud, plus the cost of missing a fraudulent return, both fall on the same overstretched teams.
This is why we built ReBound Radar, breakthrough fraud prevention technology designed to detect and stop retail fraud in real time, without slowing down the process.
It combines physical verification, photographic evidence, and data-driven decisioning to detect and stop refund fraud in real time. This is achieved without accessing sensitive customer data. It helps operators to quickly inspect parcels, flag suspicious items, and capture photos with contextual operator comments. This evidence is then shared instantly via a custom-built API or through an enhanced Customer Support Portal, giving clear, defensible proof for refund decisions. The warnings happen before the refund goes out, not after the loss has already occurred.
The exposure to fraud has shifted from the sales process to the returns process. Most reverse logistics operations are still working against a problem that they cannot fully see or measure. Fraud prevention isn’t just tackling lost costs, it’s also protecting quality control practices and overall performance of the returns management process.
