(BILLIONS LOST EVERY YEAR THROUGH RETAIL FRAUD)
September 15, 2023
Hello everyone,
Every year global companies are losing large amounts of money by virtue of customers abusing company policies. Return fraud, coupon stacking, and fake accounts are costing retailers around $100 billion annually.
Some would say it is the cost of doing business.
But for retailers, it is a hard act to swallow.
Some of the practices customers use include using multiple email addresses to take advantage of promotions more than once. Another one is buying multiple items with the intention of returning most of them or wearing an item with plans to return it and not pay for it.
Some customers also buy an item and then say it is faulty and request another item be sent. Company policy requires that a new item be sent out for free as a replacement for the faulty one, (which isn’t faulty at all). These customers are then on-selling the items through another online shop. This technique is common for limited-edition sneaker drops.
Another type of policy abuse includes using bots to buy out highly valued items and re-selling them for a higher cost on a third-party platform (like the example given above). An example here would be concert tickets, which happened during sales for Taylor Swift’s Eras Tour.
These lax policies are allowing fraudsters to have a field day.
In one example I read about a pet supply company based in the U.S. that lost $3.5 million in the first quarter of 2023 after a small group of serial fraudsters exploited a promotion code for a 35% to 50% discount.
Trying to fight back against this type of abuse is extremely difficult as companies don’t have the resources or the time to check every claim. Perhaps red-flagging customers who appear to show repeated behaviors is a way to fight bad actors who are taking advantage of programs.
In other news…
Arm debuted on the stock market on September 14. IPO was priced at $51 a share. It jumped nearly 20% during intraday trading. At the open it was valued at almost $60 billion.
Happy weekend to you all.
Cheers,
Jacquie